Coinsquare Capital Markets Inc. (“Bitbuy”) is offering crypto contracts to purchase and sell Arbitrum 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 Capital Markets Ltd (CCML)’s platform, including an opinion that the crypto assets are not themselves securities and/or derivatives.

Coinsquare Capital Markets Ltd (CCML) has compiled the information contained in this Crypto Asset Statement to the best of its ability based on publicly available information.

ARB is the governance token of the Arbitrum DAO, which oversees the Arbitrum layer 2 scaling solution and all other components of the Arbitrum ecosystem. Arbitrum uses optimistic roll-up technology to offer transactions with increased throughput and decreased cost while leveraging the security of the Ethereum network. Arbitrum offers the ability for any Ethereum Dapp to function on its network and also facilitates the deployment of programs written in common languages like RUST, C++, and others. It has a continuously expanding ecosystem of Dapps and partners, which makes it one of the most popular layer 2 solutions for Ethereum.

As with all assets, investing in Arbitrum 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 Arbitrum 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 Arbitrum.

The most prominent portion of Arbitrum’s technology is an Ethereum layer 2 scaling solution that is built on top of the Ethereum Mainnet (layer 1) to provide increased throughput and lower costs for transactions that are processed through the Arbitrum network, but then ultimately secured by the Ethereum Mainnet. Arbitrum utilizes optimistic rollup technology to roll multiple transactions up into one transaction on Ethereum layer 1. Layer 2 solutions are the core of Ethereum’s rollup-centric roadmap, which focuses on scaling the network via external execution layers like Arbitrum while using the Ethereum Mainnet for data availability and settlement. Following the successful transition to proof-of-stake and the 2024 implementation of EIP-4844 (Proto-Danksharding), Arbitrum has been more deeply integrated into the Ethereum ecosystem through the use of "blobs," which significantly reduced layer 2 transaction costs. Investors should be aware that while these technical milestones have been reached, the continued evolution of the Ethereum roadmap—including future data availability upgrades—remains critical to Arbitrum’s performance. Any unforeseen technical hurdles or shifts in Ethereum’s long-term scaling strategy could still negatively impact market sentiment and the price of the ARB token.