1 General Provisions

1.1 This System is hereby formulated to strengthen the whistle-blowing management of BLUECITY Group, standardize the whistle-blowing process, and ensure the healthy development of BLUECITY Group.

1.2 The term “whistle-blowing” as mentioned in this System refers to the practice that any entity or individual, in public or private form, informs the Company’s Internal Control Department of any violation of the Company’s code of ethics and any other act that damages the Company’s interest.

1.3 The Company’s whistle-blowers and the persons being whistle-blown against include the Company’s senior management, all affiliated institutions, all departments and all staff, and run through all aspects of the Company’s operation management and business development.

1.4 In order to ensure the interest of the whistle-blower, all the whistle-blowing information will be kept confidential from the persons being whistle-blown against. The reported matters involving the senior management of the Company will be directly communicated to the audit committee to ensure the interest of the whistle-blower.

2 Whistle-blowing Scope

2.1 Violation the Company’s financial system and act affecting the accuracy of the Company’s financial report;

2.2 Violation of applicable laws and regulations of the Company;

2.3 Violation of the Company’s policies, systems and ethics;

2.4 Any form of fraud by the Company’s management and employees;

2.5 All other acts that damage the interests of the Company.

3 Whistle-blowing Channels

Whistle-blowers can report through letters, e-mails, face-to-face reports, etc., and can also report anonymously.

(1) Mailing address: Internal Control Department, No.028, Block B, Building 2, North Area, Apple Community, Baiziwan Road, Chaoyang District, Beijing, 100022

(2) Email: wubijubao@blued.com

(3) Whistle-blowing hotline: 010-58769662

(4) On-site whistle-blowing acceptance department: Internal Control Department

4 Whistle-blowing Handling Process

4.1 Registration

(1) The Internal Control Department shall set up whistle-blowing registration personnel to record all reported matters, and relevant e-mails, letters or interview records must be archived. Relevant e-mails need to be printed and archived; relevant letters need to be archived with envelopes and text.

(2) After recording the reported matters, the whistle-blowing registration personnel shall discuss with the person in charge of the Internal Control Department to determine whether the investigation conditions are met in respect of the reported matters.

(3) For the reported matters that do not meet the investigation conditions, the whistle-blowing registration personnel shall record the reasons and report to the person in charge of the Internal Control Department for signature before archiving.

4.2 Acceptance

(1) For the reported matters that meet investigation conditions, the person in charge of Internal Control Department shall designate a person to be in charge of specific investigation project and establish an investigation team to conduct investigation.

(2) The whistle-blower shall have the right to know about the acceptance of the reported matters and may make inquiries to the relevant personnel of the Internal Control Department.

4.3 Investigation

(1) The person in charge of the investigation project shall carry out the investigation according to the actual situation of the specific reported matters.

(2) The person in charge of the investigation project shall, based on the specific situation, decide whether to contact the whistle-blower for additional information. If necessary, the whistle-blowing personnel should try not to meet the whistle-blower directly to reduce the risk of the whistle-blower.

4.4 Report

(1) After completing the necessary investigation procedures, the investigation team shall, according to the facts verified by investigation, issue an investigation report and report it to CEO and CFO;

(2) Major issues and whistle-blowing issues involving CEO and CFO shall be reported to the board of directors. In addition, all whistle-blowing on improper matters related to financial reports shall be reported to the board of directors.

4.5 Handling

(1) After the whistle-blowing information is verified, the follow-up punishment means include written warning, notification of criticism and demerit recording, immediate termination of the labor contract, and transfer to the judicial authority for handling according to law.

(2) Any punishment decision shall not affect the Company’s request for compensation for the Company’s losses in the form of apology and elimination of influence by, and deduction of salary or bonus of the employees who violate the discipline, etc., as well as the adoption of any legal means to hold the employees who violate the discipline civilly and criminally liable and recovery of the Company’s property.

5 Whistle-blowing Management Requirements

5.1 The withdrawal system shall be implemented in the whistle-blowing investigation.If the whistle-blowing personnel are relatives or friends of the whistle-blower or the person being whistle-blown against, or the whistle-blower or his relatives or friends have interest in the reported matters, or there are other circumstances that may affect the fair handling of the reported matters, the whistle-blowing personnel shall take the initiative to withdraw, and the whistle-blower shall also have the right to request those related to or implicated in the reported matters to withdraw.

5.2 The whistle-blower shall, as far as possible, inform the name and entity of the person being whistle-blown against, and specific circumstances and evidence of the facts of violation of laws and disciplines by the whistle-blower, and shall be responsible for the contents reported, shall not conduct whistle-blowing on behalf of others，and shall not use the whistle-blowing system to retaliate against the person being whistle-blown against. If it is verified that the person being whistle-blown against is falsely accused of or slandered intentionally, the case shall be dealt with in accordance with relevant laws and regulations.

5.3 The whistle-blower shall reflect the problem through normal channels of the Company，not through other channels other than the Company, and shall not use extreme ways to reflect the problem.

5.4 When it is necessary for the whistle-blower to cooperate in investigation and evidence collection, the whistle-blower shall actively cooperate, and shall not provide false information or interfere with the investigation.

5.5 Relevant departments and personnel shall actively cooperate with the investigation staff to carry out investigation and evidence collection.

5.6 Protecting Whistle-blowers

(1) The whistle-blowing personnel shall keep the relevant information of the whistle-blowerand the specific contents of the reported matters strictly confidential, and the relevant investigation shall be carried out without exposing the identity of the whistle-blower. In any case, the name, entity, contact information and other information of the whistle-blower shall not be disclosed unless the whistle-blower agrees. The whistle-blowing personnel who violate the confidentiality regulations or improperly perform their duties shall be dealt with seriously according to the circumstances and consequences.

(2) BLUECITY Group is committed to protecting the legitimate rights and interests of whistle-blowers from being infringed upon.No entity or individual may block or suppress whistle-blowers’ whistleblowing under any excuse, or retaliate against whistle-blowers in any way. Those who retaliate against the whistle-blowers shall, once verified, be dealt with seriously in accordance with the relevant provisions of the Company, and if the case constitutes a crime, they shall be transferred to the judicial authority for handling according to law.

6 Reward for Whistle-blowing

6.1 If the information about the fraud provided by the whistle-blower is verified through the investigation of the Internal Control Department, the Internal Control Department shall recommend the reward amount based on the amount involved in the reported event, the validity of the clues, the nature and severity of the event and other factors, and upon the approval of the Company’s management, give the whistle-blower cash or cash equivalents ranging from RMB 5,000 to RMB 1 million as rewards.

6.2 Where the whistle-blower provides direct and effective evidence to report cases which involve employees’ duty encroachment and non-state staff’s taking bribes and which are recognized as criminal cases by the judicial authority, the Internal Control Department will recommend the reward amount based on the final case value investigated and dealt with, and upon the approval of the Company’s management, give the whistle-blower cash or cash equivalents ranging from RMB 5,000 to RMB 10 million as rewards.

7 Archiving of Whistle-blowing Files

7.1 The whistle-blowing files refer to all the data recording the whole process of registration, acceptance, investigation and report of whistle-blowing, including text data, audio recording data and all other forms of data.

7.2 After the investigation report is issued, the person in charge of the whistle-blowing investigation project shall collect and sort out the relevant whistle-blowing files and transfer them to the personnel in charge of file management. All whistle-blowing files are classified as confidential for management.

8 Supplementary Provisions

8.1 The Internal Control Department is responsible for the interpretation of this System.

8.2 This System shall be implemented from the date of promulgation.