About this Statement
Coinsquare Capital Markets Ltd. (“Coinsquare”) is offering crypto contracts to purchase and sell Curve DAO (CRV) in reliance on a prospectus exemption granted by the Canadian Securities Administrators (CSA) in the amended and restated exemptive relief decision dated October 11, 2024. 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.
About Curve DAO
Curve (CRV) is an Ethereum-based token that serves as the utility and governance mechanism for Curve Finance, a decentralized exchange (DEX) and automated market maker (AMM) optimized for low-slippage trading of stablecoins and other pegged assets. Launched in August 2020, the CRV token is primarily used to incentivize liquidity providers across the protocol’s various pools and to facilitate decentralized governance through the Curve DAO. Holders can "vote-lock" their CRV (converting it into veCRV) for periods ranging from one week to four years. This process allows users to earn a share of protocol trading fees, boost their CRV rewards on provided liquidity, and vote on "gauge" weight allocations, which determine the distribution of CRV emissions to specific pools.
Risks
As with all assets, investing in Curve DAO is not without some general risks. Many of these risks are identified and explained in our Risk Statement [hyperlink to risk statement]. In addition to the general risks, we outline some risks that are specific to Curve DAO 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 Curve DAO.
CRV token reliance on multiple networks
While CRV originated as an ERC-20 token on the Ethereum Mainnet, the protocol and token have expanded significantly across the decentralized finance (DeFi) ecosystem. CRV is now available and utilized across a multitude of Layer 1 and Layer 2 networks, including Arbitrum, Optimism, Polygon, Avalanche, Fantom, and Celo, among others. This multi-chain presence relies on various bridging technologies and cross-chain protocols to maintain token fungibility and liquidity. Consequently, the integrity and value of CRV are intertwined with the technical stability, security, and consensus mechanisms of these diverse blockchain environments. Any exploit, network outage, or fundamental vulnerability in any of these integrated networks—or the bridges connecting them—could result in lost funds, fragmented liquidity, and significant downward pressure on CRV’s market capitalization and price.
CRV reliance on stability of Curve DAO protocol
The value of the CRV token is intrinsically linked to the health and security of the Curve DAO protocol. In July 2023, the protocol experienced a major security incident where a reentrancy vulnerability in specific versions of the Vyper programming language led to the exploitation of several liquidity pools, resulting in the theft of tens of millions of dollars in assets. This event highlighted that protocol risks extend beyond Curve's own smart contracts to include the underlying compiler and infrastructure. Furthermore, the protocol faces "liquidation risk" associated with large concentrated positions of CRV used as collateral on other DeFi platforms; significant price volatility can trigger cascading liquidations that negatively impact CRV's market price. Additionally, because Curve specializes in pegged assets, any permanent "de-pegging" of a major stablecoin or liquid staking derivative (such as stETH) within its pools poses a systemic risk. If such an asset fails to return to its peg, liquidity providers may suffer "impermanent loss" that becomes permanent, potentially leading to a migration of capital away from the protocol and a subsequent decline in CRV’s utility and value.
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 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.
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