Coinsquare Capital Markets Ltd. (“Bitbuy”) is offering crypto contracts to purchase and sell USD Coin (USDC) 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.

USDC is backed by fully reserved assets, redeemable on a 1:1 basis for US Dollars. USDC is issued by Circle Internet Financial (Circle). Previously governed by the Centre Consortium, Circle now solely manages the governance and issuance of USDC, maintaining the technical, policy, and financial standards. As an open standard and public smart contract, USDC has rapidly grown the largest stablecoin industry ecosystem in the world.

As with all assets, investing in USD Coin is not without some general risks. Many of these risks are identified and explained in our Risk Statement. In addition to the general risks, we outline some risks that are specific to USD Coin 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 USD Coin.

The intention of USDC is for each token to be valued at $1 USD at all times. This value is maintained by using a 100% collateralization approach, where every USDC in circulation is backed by cash and cash-equivalent assets. The majority of the USDC reserve is held in the Circle Reserve Fund (USDXX), an SEC-registered government money market fund managed by BlackRock, which invests in short-dated U.S. Treasuries and overnight repurchase agreements. The remainder of the reserve is held in cash at regulated financial institutions, consisting primarily of global systemically important banks (G-SIBs). While Dai, an overcollateralized, algorithmic stablecoin has long maintained transparency into its collateral reserves at all times through daistats.com, Circle now provides frequent transparency regarding its own reserves. Circle publishes monthly attestation reports, independently audited by Deloitte, which verify the total value of assets backing USDC. Additionally, Circle provides weekly updates on minting and redemption activity, and the portfolio holdings of the Circle Reserve Fund are disclosed on a daily basis. Since the US dollar reserves are the basis of USDC’s peg to the $1 USD value, it is important for investors to monitor these collateral reports. Any variation in the supply of USDC token to the value of US dollar reserves, or the inability to access those reserves, may have an adverse effect on USDC’s peg to the US dollar. For instance, in March 2023, the price of USDC temporarily dropped below $1.00 USD (falling to approximately $0.87 USD) following the collapse of Silicon Valley Bank, where approximately $3.3 billion of the USDC cash reserves were held. While the peg was subsequently restored after the reserves were recovered, this event highlights the counterparty and liquidity risks associated with the financial institutions holding the backing assets.‍

Although USDC was initially offered only as an ERC20 token on Ethereum Mainnet, it was subsequently made available natively on multiple blockchains, including Solana, Avalanche, TRON, Noble, Algorand, Stellar, Base, Optimism, Arbitrum, and Polkadot, among others. Additionally, bridged versions of USDC exist on various other networks. Consequently, the supply of USDC is distributed among these various networks, meaning that the integrity of the USDC token is dependent on the stability and security of these different blockchain systems. Any fundamental issues in any of these networks could impact USDC’s market sentiment, market cap, and token price.