Crypto Asset Statement - Solana

Coinsquare Capital Markets Inc. (“Coinsquare”) is offering crypto contracts to purchase and sell Solana 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.   

In late 2017, founder Anatoly Yakovenko published a whitepaper draft detailing a new timekeeping technique for distributed systems called Proof of History (PoH). In blockchains like Bitcoin and Ethereum, the time required to reach a consensus on the order of transactions is a limitation for scalability. Anatoly believed his new technique could automate the transaction ordering process for blockchains, leading to the origin of the scale-friendly Solana. The founding team included former Apple engineers in addition to some Qualcomm veterans. They initially named the project Loom but later rebranded it to Solana to avoid confusion with the Ethereum Layer-2 scaling solution, Loom Network.

As with all assets, investing in Solana 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 Solana 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 Solana.

Centralization of Solana Network

Solana Network’s History of Outages and Issues

To be made available for trading on Coinsquare’s platform, a digital asset must pass the following due diligence reviews:

1. Coinsquare Securities Law Assessment
2. Coinsquare Digital Asset Security Audit
3. 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.

1. Timothy Craig. “How Decentralized is Solana?” Crypto Briefing. October 16, 2021. https://cryptobriefing.com/how-decentralized-is-solana/
2. Oluwapelumi Adejumo. “Solana sued for being ‘centralized,’ ‘security’.” Crypto Slate. July 13, 2022. https://cryptoslate.com/solana-sued-for-being-centralized-security/
3. Martin Young. “Reliably unreliable: Solana price dives after latest network outage.” Coin Telegraph. June 2, 2022. https://cointelegraph.com/news/reliably-unreliable-solana-price-dives-after-latest-network-outage
4. Sujith Somraaj. “Solana Challenges Poor Safety Rating From DeFi Watchdog.” Decrypt. June 9, 2022. https://decrypt.co/102416/crypto-ratings-project-defi-safety-downgrades-solana-infrastructure-concerns