Crypto Asset Statement - Fantom
About this Statement
Coinsquare Capital Markets Inc. (“Coinsquare”) is offering crypto contracts to purchase and sell Fantom in reliance on a prospectus exemption granted by the Canadian Securities Administrators (CSA) in the exemptive relief decision dated October 12, 2022. The statutory rights of action for damages and the right of rescission in section 130.1 of the Securities Act (Ontario) and similar legislation in the other CSA jurisdictions do not apply in respect of a misrepresentation in this statement to the extent that a crypto contract is distributed under the above-noted prospectus relief.
No securities regulatory authority in Canada or any other jurisdiction has expressed an opinion about any of the crypto assets (or crypto contracts) that are available through Coinsquare’s platform, including an opinion that the crypto assets are not themselves securities and/or derivatives.
Coinsquare has compiled the information contained in this Crypto Asset Statement to the best of its ability based on publicly available information. Coinsquare is providing this Crypto Asset Statement on an “as is” basis and makes no representation or warranty as to accuracy or completeness of the contents.
Founded by South Korean computer scientist Dr. Ahn Byung lk in 2018, as an alternative to the existing blockchains that are struggling to scale. Fantom is a network that solves this existing scalability problems in traditional blockchains such as Ethereum, instead employing a newly pioneered consensus mechanism which uses gossip to propagate consensus.
As with all assets, investing in Fantom is not without some general risks. Many of these risks are identified and explained in our Risk Statement. In addition to the general risks, we outline some risks that are specific to Fantom below. While we make an effort to identify every source of risk, we encourage you to do your own research and ensure you are comfortable investing in Fantom.
Departure of Key Fantom Personnel
Fantom Foundation, an organization dedicated to the development of Fantom, saw the exit of two high-profile personnel in April 2022.1 Technical adviser Andre Cronje and senior solutions architect Anton Nell announced their exit from the crypto industry simultaneously. In an exit article posted on Rekt.news, the pair claimed that they were terminating 25 apps and alleged that Fantom and other apps and services exist to extract value for a small set of insiders who are now exiting the space.
The Fantom Foundation responded to those claims and minimizing the effect of their departure, saying that no apps were terminated and that neither Cronje or Nell were core developers at Fantom.2 It appears that no legal action was taken by Fantom Foundation against Cronje and Nell for their comments. Investors should consider this situation, and the potential for market sentiment to be affected by this event or any similar events in the future.
FTM token reliance on multiple networks
Although FTM was initially offered only as an ERC20 token on Ethereum Mainnet, it was subsequently made available as a token on it’s own (Fantom Opera) network, a BEP20 token on BNB Network, a token on Solana Network, and as a token on the Celo network.3 Consequently, the supply of FTM is distributed among these various networks, meaning that the integrity of FTM token is dependent on the stability and security of these different blockchain systems. Any fundamental issues in any of these networks could impact FTM’s market sentiment, market cap, and token price.
Coinsquare’s Due Diligence for Digital Assets
To be made available for trading on Coinsquare’s platform, a digital asset must pass the following due diligence reviews:
- Coinsquare Securities Law Assessment
- Coinsquare Digital Asset Security Audit
- New Digital Asset Business Case
Coinsquare undertakes these three levels of due diligence in order to determine whether the digital asset is compliant with our legal and regulatory obligations, is secure, and has historical data supporting a beneficial business case. Coinsquare’s New Product Committee must provide final approval for a new digital asset to be made available on the platform.
- Fantom Foundation. “We are building a highly scalable blockchain ecosystem.” https://fantom.foundation/about/
- Zhiyuan Sun. “Fantom Foundation issues clarification statement about departure of Andre Cronje and Anton Nell.” Cointelegraph. March 11, 2022. https://cointelegraph.com/news/fantom-foundation-issues-clarification-statement-about-departure-of-andre-cronje-and-anton-nell
- CoinMarketCap. “Fantom (FTM).” https://coinmarketcap.com/currencies/fantom/
Published Date: July 22, 2022