Cosmos (ATOM) Crypto Asset Statement
PLEASE READ THIS CAREFUL. BY PROCEEDING TO TRANSACT ATOM, YOU ACKNOWLEDGE AND ACCEPT THE STATEMENTS SET OUT BELOW.
About this Summary
Ndax believes that our users should understand the crypto assets that they are able to trade and stake using our crypto trading platform (the “Platform”). One of the crypto assets we offer on the Platform is ATOM. We created this summary to help you understand the basics of ATOM as well as some of the risks involved in trading it. While we tried to describe the key features of ATOM here, this summary isn’t meant to tell you everything you’d want to know before investing in ATOM. You should also do your own research on ATOM to make sure you are comfortable investing in it.
Description of ATOM
History of ATOM
In the year 2014, popular blockchain developers Jae Kwon and Ethan Buchman introduced Tendermint Byzantine Fault Tolerance (BFT) to the crypto world. This laid the foundations for the Cosmos network of today. Then, in June 2016, the duo started working on a project called GNuclear with a vision to create a decentralized network of blockchains that are interoperable. With help from the community, the project started to grow and was eventually renamed Cosmos.
In 2017, Cosmos held an initial coin offering (ICO) of ATOM, during which it raised more than $17M. By December 2018, the network began its major testing program and the Cosmos mainnet was finally launched in March 2019.
What is ATOM used for
Cosmos creates interoperability between blockchains, making it ideal for a variety of use-cases. Blockchains within the ecosystem can effectively communicate, exchange data, and process transactions quickly. Developers can also use the network to build highly scalable and secure dApps.
The native governance token ATOM plays a key role in the Cosmos network. By owning ATOM, community members gain the right to vote on network governance proposals. It can also be delegated to validators to earn rewards.
How ATOM works
The Cosmos ecosystem essentially consists of three main parts.
- Zones: Zones are individual blockchain networks that can operate independent of the Cosmos ecosystem.
- Cosmos Hub: The Cosmos Hub is the meeting point of all the blockchains in the network. Every Zone in the network is connected to the Hub. The Zones use an Inter-Blockchain Communications Protocol to communicate with other blockchains in the network.
- Tendermint BFT Engine: The Tendermint BFT engine is central to all the operations of the Cosmos ecosystem. Instead of having the traditional three-layered blockchain network, Tendermint BFT packs the network and consensus layers into a single-engine. The engine secures the network, adds blocks to the blockchain, and lets developers build their own blockchain networks.
Tendermint uses a proof-of-stake (PoS) consensus mechanism where users can become validators by staking ATOM. The top 100 users staking the highest number of ATOM tokens become validators and can vote on governance decisions. Validators are rewarded with ATOM tokens based on how much they stake.
Risks
Before entering into an agreement (a “Crypto Contract”) with Ndax to buy or sell any crypto assets through the Platform, it is important to understand the risks. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.
Like other crypto assets, there are some general risks associated with investing in ATOM. We describe many of these general risks in the risk statement we publish on our website that you have already acknowledged, including risks relating to: (i) short history; (ii) volatility in the price of crypto assets and loss of liquidity; (iii) potential decrease in global demand for crypto assets; (iv) The blockchains on which crypto assets operate may temporarily or permanently fork or halt; airdrops; (v) issues with the cryptography underlying the Crypto networks; (vi) custodial wallet systems; (vii) uncertainty in regulation and future financial institution support; (viii) currency risks; (ix) concentration risks; (x) electronic trading and dependence on the internet; (xi) cyber security risks; (xii) inadequate due diligence; (xiii) Ndax’s reliance on vendors and third-party service providers; (xiv) liquidity constraints; (xv) no voting rights; (xvi) lack of investor protection insurance; (xvii) commissions and other charges for trading; (xviii) no advise; (xix) transfers; (xx) beta features; (xxi) unforeseeable risks; and (xxii) conflicts of interest. We also point out a risk that is specific to ATOM below. While we tried to describe the key risks associated with ATOM here and in our risk statement, these aren’t all of the risks associated with trading in ATOM. You should also do your own research on ATOM to make sure you are comfortable investing in it.
Risks Specific to Staking ATOM
Prior to staking your crypto assets, you acknowledge that:
- staked ATOM begins to start earning rewards after one day;
- staked ATOM may be withdrawn at any time;
- given the volatility of crypto assets, the value of your staked ATOM when you sell or withdraw it, and the value of any rewards you earn through staking, may be significantly less than their current value;
- there is no guarantee that you will receive any rewards on staked ATOM;
- past rewards are not indicative of expected future rewards;
- the rewards you are entitled to may be changed at the discretion of Ndax;
- you may lose all or a portion of your staked ATOM if the validator does not perform as required by the network; and
- additional risks can be found in the Risk Statement.
Conflict of Interest Disclosure
Ndax has assessed potential conflicts of interest associated with the offering, and ongoing availability of ATOM through the Platform. As of the date of this statement, Ndax has not identified any actual, material, or reasonably foreseeable conflict of interest that would be expected to impair our ability to act in the best interests of clients or to make fair, objective, and independent decisions regarding ATOM. Ndax maintains policies and procedures designed to identify, manage, and address conflicts of interest on an ongoing basis and will update our disclosures if any material conflict is identified in the future. For additional information about the material conflicts of interest identified by us, please refer to our Conflicts of Interest Statement, the latest version of which can be found on our Website.
Regulatory Information
Ndax is a registered investment dealer under securities legislation in all provinces and territories of Canada, and is a member of the Canadian Investment Regulatory Organization (CIRO) and of the Canadian Investor Protection Fund (CIPF). Ndax is offering Crypto Contracts in reliance on a prospectus exemption contained in the exemptive relief decision Re NDAX Canada Inc. dated December 19, 2024 (found here) and under the terms and conditions imposed by CIRO on Ndax’s membership with CIRO (found here). Any fiat currency held in users’ accounts is protected by CIPF’s Investment Dealer Fund in accordance with its Coverage Policy. However, CIPF coverage does not extend to any virtual assets held in users accounts. These assets are not eligible for deposit insurance or any protection from the Canada Deposit Insurance Corporation (CDIC) or CIPF.
Please be aware that the statutory rights of action for damages and the right of rescission in the securities legislation of each province and territory of Canada do not apply in respect of a misrepresentation in this Crypto Asset Statement.
Prior to offering a Crypto Contract on ATOM, Ndax assesses whether ATOM is a security and/or a derivative under the securities and derivatives laws of Canada. Ndax’s assessment includes a review of the history of ATOM (such as how it was created and its governance structure), its characteristics, its market capitalization and any regulatory concerns regarding ATOM. Based on its assessment, Ndax concluded that ATOM is neither a security nor a derivative. However, there is a risk that this conclusion could change in the future. In that case, Ndax may be required to halt or withdraw ATOM from trading on the Platform and stop any future trading of Crypto Contracts based on ATOM, and users holding ATOM may be required to liquidate their positions, potentially at a significant loss. In this event, users holding positions in ATOM will be notified via the Platform or other electronic means and advised of the options available to them and any applicable period to sell or withdraw their positions in ATOM.
No Canadian securities regulatory authority has expressed an opinion about ATOM, including an opinion that ATOM is not itself a security and/or derivative.
Last Updated: August 11,2026