About this Summary

Ndax Canada Inc. (“Ndax”, “we” and “our”) 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 CELO. We created this summary to help you understand the basics of CELO as well as some of the risks involved in trading in CELO. While we tried to describe the key features of CELO, this summary isn’t meant to tell you everything you’d want to know before investing in CELO. You should also do your own research on CELO to make sure you are comfortable investing in it.

Description of CELO

History of CELO

Celo was founded in 2017 by The Celo Foundation, a non-profit organization based in the US that supports the growth and development of the open-source Celo Platform.

According to the Celo Foundation, useability and price stability remain two of the main inhibitors of cryptocurrency adoption. Celo's mobile-first approach aims to bridge this gap.

What is CELO used for

Celo is a payments platform attempting to make crypto payments as easy as possible to support communities around the world who are still left without critical financial services. Instead of having to manage complex crypto addresses, users can send cryptocurrencies using mobile phone numbers.

CELO is a proof-of-stake (PoS) token used for transaction fees, governance participation, and related activities on the Celo network. It is a freely tradable cryptocurrency on the ERC-20 token standard.

How CELO works

CELO aims to be a cryptocurrency for everyone –– not just for blockchain techies or fintech enthusiasts. That’s why you don’t need much in order to send and receive CELO. CELO is designed to work with just a smartphone and an internet connection.

Exchanging money with CELO is as fast and easy as sending a text message. Senders can simply use a recipient's phone number to make a financial transaction –– and when signing up to a wallet that supports CELO, such as Valora, you need nothing but a mobile phone number.

Every CELO in circulation is backed by the Celo Reserve which is made up of CELO (a native, fixed-supply asset) and a basket of other cryptocurrencies. Since CELO is based around an elastic supply rule, the number of CELO in circulation can adapt to fluctuations in demand. And thanks to local coins, the reserve can theoretically release more Celo Dollars into circulation while taking Celo Euros out of circulation, and vice versa.

On the technical side, CELO is built using the Go implementation of Ethereum and leverages a Proof-of-Stake (PoS) consensus algorithm. There are validators and nodes which help verify transactions and secure the network.

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 CELO. Each of these risks is described in more detail in the Risk Statement provided to you at the time that you open your account with us and is also available online on the Ndax website and app. You should review the Risk Statement.

While we have tried to describe the key risks associated with CELO here and in our Risk Statement, we emphasize that this Crypto Asset Statement is not exhaustive of all of the risks associated with trading in CELO. You should also do your own research on CELO to make sure you are comfortable investing in such a crypto asset.

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 accordance with the terms of the Decision Document dated December 19, 2024 that we entered into with the Canadian securities regulators. Any fiat currency held in user's accounts are protected by the CIPF's Investment Dealer Fund in accordance with its Coverage Policy. However, CIPF coverage does not extend to any virtual assets held in user's accounts. These assets are not eligible for deposit insurance or any protection from the Canada Deposit Insurance Corporation (CDIC) or CIPF.

The statutory rights of action for damages and the right of rescission in the securities legislation of each province and territory of Canada would not apply in respect of a misrepresentation in this Crypto Asset Statement.

Prior to offering a Crypto Contract on CELO, Ndax assesses whether CELO 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 the CELO (such as how it was created and its governance structure), its characteristics, its market capitalization, and any regulatory concerns regarding CELO. Based on its assessment, Ndax concluded that CELO is not a security or 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 CELO from trading on the Platform and stop any future trading of Crypto Contracts based on CELO, and users holding CELO may be required to liquidate their positions, potentially at a significant loss. In this event, users holding positions in CELO 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 CELO.

No Canadian securities regulatory authority has expressed an opinion about CELO, including an opinion that CELO is not itself a security and/or derivative.