Technical Documentation

1. Platform Overview

BarrelProof Labs operates as a regulatory intelligence middleware designed to facilitate the technical preparation of entities subject to supervision by the CNMV, EBA, and ESMA. The platform transforms complex operational data into structured technical evidence, enabling issuers and crypto-asset service providers (CASPs) to manage transparency and prudential obligations in a deterministic manner.

2. Architectural Principles

The platform is governed by three core principles to ensure legal and operational certainty:

• Non-Custodial Nature: The system is designed to operate without possessing, controlling, or transmitting private keys or asset access credentials, remaining outside MiCA custody services.
• Algorithmic Determinism: Analysis engines rely on mathematical logic based on EU technical standards (RTS/ITS) to ensure results are replicable and neutral.
• Full Auditability: All analytical processes generate immutable records enabling deferred reconstruction of technical decisions for supervisory purposes.

3. Data Flow and Methodology

1. Ingestion: Collection of legal identifiers (LEI), asset codes (DTI), governance documents, and on-chain data flows.
2. Analysis: Execution of taxonomic validation engines and balance reconciliation under the ISO 20022 methodology.
3. Output: Generation of structured files in JSON and iXBRL formats, ready for review by the entity's compliance function.

4. Module: Proof of Reserves / Proof of Backing

This module automates daily verification that the market value of asset reserves is equal to or greater than outstanding claims.

• Liquidity Bucket Monitoring: Verifies compliance with minimum asset maturity thresholds (1-day and 5-day) required by EBA technical standards.
• HLFI Reconciliation: Ensures reserves are invested in highly liquid financial instruments and detects deviations in bank deposit composition.

5. Module: MiCA Readiness Analysis

Provides a technical assessment of project documentation against MiCA Titles II, III, and IV.

• Taxonomy Validation: Technical audit of White Papers to ensure compatibility with ESMA iXBRL 2025 tagging.
• Classification Test: Metadata analysis engine assessing fungibility risk in NFT collections and real-world asset (RWA) projects.

6. Evidence Integrity and Audit Logging

In compliance with Article 68(9) MiCA, the platform maintains records of all alerts and analyses for 5 years (extendable to 7 years upon authority request), including documentation of logic used to discard near-miss market abuse signals.

7. Public and Private Data Handling

• On-Chain Data: Captures transaction hashes, wallet addresses, and smart-contract states from public distributed ledgers.
• Private Data: Processing of identifying information is limited to fields required by the TR MiCA reporting model and performed as a data processor under GDPR.

8. Explicit Platform Limitations

• No guarantee of legal compliance: A technical readiness score does not constitute approval by CNMV or EBA.
• Reporting responsibility: Final legal responsibility for data submission and accuracy rests solely with the authorised entity.
• Advisory neutrality: The platform does not provide personalised investment advice; outputs are objective technical indicators.

9. Regulatory Perimeter Statement

BarrelProof Labs does not provide custody, trading venue operation, order execution, or asset exchange services. Its activities are strictly limited to the provision of resilient ICT infrastructure under the DORA framework.