Coinsquare Capital Markets Inc. (“Coinsquare”) is offering crypto contracts to purchase and sell Dogecoin 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.
Dogecoin is a well-known cryptocurrency that trades using the ticker symbol DOGE. It uses the Scrypt algorithm and Proof of Work consensus for mining new coins, similar to Bitcoin mining. Dogecoin was founded in 2013 by Jackson Palmer and Billy Markus as a joke that was intended to poke fun at Bitcoin and function as a payments coin. However, Dogecoin gained a cult following in various internet groups, which caused its popularity to grow. In 2021, Dogecoin saw a significant market capitalization increase as it became one of the original “memecoins.” Elon Musk became a notable believer and promoter of Dogecoin, frequently tweeting about the coin and adding it as an accepted form of payment for Tesla merchandise. Dogecoin features the face of the Shiba Inu dog from the DOGE meme as its logo.
As with all assets, investing in Dogecoin is not without some general risks. Many of these risks are identified and explained in our Risk Statement.
The relevant sections in the Risk Statement are as follows:
Platform Risk, Short History Risk, Price Volatility, Potential Decrease in Global Demand for Digital Assets, Potential for Illiquid Markets, Transfers of Digital Assets are Irreversible, Concentration Risks, Uncertainty in Regulation, Financial Institutions May Refuse to Support Transactions Involving Digital Assets, Digital Assets’ Blockchain May Temporarily or Permanently Fork and/or Split, Cyber-Security Risk, Airdrops, Issues with Cryptography Underlying Digital Asset Networks, Internet Risk, Open Loop System, Risk if Entity Gains a 51% Share of Digital Asset Network, Possible Increase in Transaction Fees, Possible Increase in Service Fees, Limited Canadian Investor Protection Fund Account, No Voting Rights, Custody of Digital Assets, Custody Risk Insurance, Threats to Coinsquare’s Physical Assets, Covid-19 Outbreak, Use of Leverage, Halting, Suspending, and Discontinuing Digital Assets.
In addition to the general risks, we outline some risks that are specific to Dogecoin 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 Dogecoin.
Dogecoin is one of many digital assets that could be classified as a memecoin. Memecoins follow internet trends and are susceptible to volatility influenced by social media activity, online jokes, and adoption or comments by celebrities or public figures. On multiple instances, Dogecoin has seen very fast and very significant increases in its market capitalization as its meme status grew. However, as with typical internet memes, trends may be fleeting and those steep increases have sometimes level off very quickly as meme-followers lost interest.1
As Dogecoin’s adoption and meme status grew in late 2021, Elon Musk (CEO of Tesla, SpaceX) emerged as a supporter of the asset and its network. Elon Musk’s preferred mode of communication has been his twitter account, through which he has published numerous tweets about crypto and, specifically, Dogecoin. Among the numerous instances, Elon Musk tweeted in December 2021 to tell the public that Tesla planned to accept DOGE for merchandise purchases which caused DOGE price to increase by 20% within hours.2 In June 2022, Elon made comments in support of Dogecoin at the Qatar Economic Forum, after which the price of DOGE rose by 13% within the day.3 These are only two instances of Elon Musk’s influence on the price of DOGE. While it appears that Elon’s comments tend to have a positive impact on Dogecoin’s market capitalization, investors should weigh the potential impact of negative comments should Elon Musk’s sentiments towards Dogecoin ever change.
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.
