Crypto Asset Statement - SushiSwap
About this Statement
Coinsquare Capital Markets Inc. (“Coinsquare”) is offering crypto contracts to purchase and sell SushiSwap 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.
SushiSwap was founded by two anonymous developers named 0xMaki and Chef Nomi on August 26 2020, when Chef Nomi released a Medium post detailing the SushiSwap protocol. SushiSwap is a decentralized exchange (DEX) and SUSHI is the Ethereum token that powers this cryptocurrency exchange. Holders of SUSHI can participate in community governance and stake their tokens to receive a portion of SushiSwap’s transaction fees. SushiSwap is also non-custodial, which means that it does not need to own your tokens in order for you to trade them. Instead, SushiSwap allows users to make peer-to-peer trades, using liquidity that is supplied by other users. SushiSwap is also known for using the Automated Market Maker (AMM) model, first made famous by Uniswap.
As with all assets, investing in SushiSwap 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 SushiSwap 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 SushiSwap.
SUSHI token reliance on Ethereum network
SUSHI is offered only as an ERC-20 token on the Ethereum network. Consequently, the integrity of the SUSHI token and the SushiSwap protocol is dependent on the stability and security of the Ethereum protocol. Any fundamental issues in the Ethereum network could impact SUSHI’s market sentiment, market cap, and token price.
Concentration of SUSHI Supply
The SUSHI token supply is highly concentrated. The top 10 wallet addresses hold 52.4% of the supply, and the top 100 wallet addresses hold 85.5% of the supply1. Currently, 50% of the maximum supply of SUSHI is in circulation. New SUSHI tokens enter circulation at a rate of 100 tokens per block validated, using a proof-of-stake system.
Concentrated Control of Project Development
SushiSwap was originally created by two anonymous developers, known as 0xMaki and Chef Nomi. These individuals were solely responsible for SushiSwap’s original code, product development and business operations2. In September of 2020, formal administrative control of the SushiSwap protocol was transferred to Sam Bankman-Fried, CEO of cryptocurrency exchange FTX and trading firm Alameda Research3, while technical developments are in the hands of a community and heavily involved by 0xMaki. Further developments in SushiSwap are highly dependent on the involvement of 0xMaki, and may be influenced by the business interests of Bankman-Fried.
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.
- “SUSHI Holder Statistics” CoinMarketCap, Jul 21, 2022. https://coinmarketcap.com/currencies/sushiswap/holders/
- “Who Are the Founders of SushiSwap?” CoinMarketCap, July 21, 2022 https://coinmarketcap.com/currencies/sushiswap/
- Ali Reza, “Chef Nomi Transfers SushiSwap Control Over TO FTX CEO, SBF”, Inside Bitcoins, September 7, 2020. https://insidebitcoins.com/news/chef-nomi-transfers-sushiswap-control-over-to-ftx-ceo-sbf
Published Date: July 22, 2022