Coinsquare Capital Markets Inc. (“Coinsquare”) is offering crypto contracts to purchase and sell Toncoin 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.
Toncoin is the native token of the The Open Network (TON) layer-1 blockchain. The Open Network is supported by numerous contributors, the biggest of which is the TON Foundation. Originally, TON Blockchain was planned to be a project of the popular messaging app, Telegram, but after receiving a court order from the US Securities Exchange Commission (SEC) in 2020, Telegram departed the project. TON Blockchain uses a proof-of-stake consensus mechanism and techniques like sharding and segmentation to allow it to process transactions with increased speed and throughput.1 Toncoin is offered on various networks, however Coinsquare only supports native TON on the TON Blockchain.
As with all assets, investing in TON is not without some general risks. All of the risks of tranding and staking crypto that are identified and explained in our Risk Statement [hyperlink to risk statement] apply to TON. 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 Toncoin 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 Toncoin.
The TON Blockchain is in direct competition other layer-1 networks that have similar features such as Ethereum, Cosmos, Avalanche, Polkadot, and many others. The succent of TON Blockchain and Toncoin relies on continuous user adoption and user retention to ensure that TON stays among the upper echelon of layer-1 competitors. Potential investors should be aware of TON Blockchain’s competition and stay apprised of its positioning in that market.
As of the date on which this Crypto Asset Statement was written, the top “whales”, determined by the amount of TON held by any single address is available on Tonscan.2 The publicly-available data shows that 20 addresses hold 73% of the total supply of TON (which was 5.12B TON at the time). Potential investors should be aware of the concentration of TON among such a small number of addresses and make theoir own determination on whether they perceive any risk due to that concentration.
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.
TON Twitter: https://x.com/ton_blockchain
TON Whitepaper: https://ton.org/whitepaper.pdf
