About this Statement
Coinsquare Capital Markets Inc. (“Coinsquare”) is offering crypto contracts to purchase and sell GALA 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.
About GALA
GALA is the official ecosystem token of Gala, which includes Gala Games, Gala Music, Gala Films and GalaChain.1 GalaChain is a layer-1 blockchain that was launched by Gala in January 2024. The GALA token was originally launched as an ERC20 token on the Ethereum mainnet in 2020, and the ERC20 version of the token remains the most widely-used version of the token, despite an equivalent GALA token being launched on GalaChain in 2024.2 Gala currently operates a bridge to allow holders to move their GALA tokens to and from ERC20 and GalaChain, however CCML recognizes the ERC20 token as the original, underlying GALA token and consequently only supports the ERC20 version.
Risks
As with all assets, investing in GALA is not without some general risks. All of the risks of trading and staking crypto that are identified and explained in our Risk Statement [hyperlink to risk statement] apply to GALA. 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 GALA 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 GALA.
Reliance on the Ethereum Network
As GALA is only supported by CCML as an ERC-20 token on the Ethereum network, it is highly dependent on the continued stability of that network. Any fundamental issues in the Ethereum network may impact GALA’s smart contract or token value. Investors should consider this dependency when evaluating GALA.
Gala Tokenomics
Gala implemented a new emission schedule which sees daily emission of new GALA tokens of an amount that is 0.25% of the difference between the total supply and the maximum supply. This new emission schedule is intended to provide gradual and consistent token release, establish more stability within the ecosystem, and provide predictability for node operators.3 Potential users and purchasers of GALA should be aware of the tokenomics of the token when evaluating GALA.
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.
References
