Ethereum (ETH) - Crypto Asset Statement

PLEASE READ THIS CAREFUL. BY PROCEEDING TO TRANSACT ETH, YOU ACKNOWLEDGE AND ACCEPT THE STATEMENTS SET OUT BELOW.

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

Description of ETH

History of ETH

Ethereum was developed as a potential solution to the shortcomings of the Bitcoin network and was proposed in 2013 by Vitalik Buterin. After initial feedback on the concept, Buterin and the founding team publicly announced its development in 2014. Soon after the announcement, Ethereum conducted a crowd sale of ETH and raised US$18.4 million for network developments and operations.

The founders launched the test version of the network, or testnet, in 2015. Almost a month after the launch of the testnet, they launched the first mainnet version of Ethereum on June 30, 2015. The fully functional Ethereum network was later launched in March 2016.

What ETH is used for

Ether (ETH) is a global digital currency that has the same value all over the world. Unlike banks, ETH transactions do not involve intermediaries, making the transactions faster, more secure, and cost-effective. Anyone can use ETH to make payments anywhere in the world. Many online and brick and mortar stores accept ETH as a means of payment.

ETH is also the native currency of the Ethereum ecosystem. Network users can use ETH to use DApps on Ethereum or pay for services of any kind within the ecosystem. It is also one of the most common cryptocurrencies used in the decentralized finance (DeFi) sphere — a new financial system built on the blockchain.

Ethereum DApps

Ethereum integrated the concept of self-executing contracts called smart contracts to blockchain. Developers can create smart contracts with varied functionalities that operate applications within the decentralized ecosystem. These apps deployed over blockchains are called decentralized applications or DApps.

They can have all the functionalities of a traditional application, but they are based on top of a decentralized network. This means, once a DApp is deployed, no central entity can control its operation. All proposed changes must be voted upon by the community members.

Ethereum Nodes

As a decentralized network, transactions on Ethereum are authenticated by computer systems distributed around the world. These systems, known as nodes and validators, help verify transactions and maintain the integrity of the blockchain through Ethereum's Proof-of-Stake (PoS) consensus mechanism.

To participate in the Ethereum network, a user can run Ethereum client software and maintain a copy of the blockchain data. Users who wish to participate directly in transaction validation and block production must stake 32 ETH and operate validator software. Once activated, validators can verify transactions, propose new blocks, and help secure the network.

Certain Staking Services Terms

You can cancel you opt-in to the staking services for any crypto-asset within the first four hours of your initial opt-in.

Please consult the table below for additional terms that currently apply to the staking service for particular crypto assets at this time. Note that APY percentages are estimates, and terms are subject to change. All terms in effect are maintained on our website.

Example: if you have 100 coins staked at 3% annual APY equal to the gross reward will be 3 coins for the year. Ndax will earn a fee of 20%, in this case 0.6 coins, and 2.4 coins will be credited to your account based on the payout frequency.

For purposes of the above table:

“Ndax Admin Fees” refers to the percentage fee on the total amount of the reward generated through staking.

“Bonding Period” refers to the amount of time it takes before you begin to generate staking rewards for that asset from the time you have started staking.

“Unbounding Period” refers to the amount of time you need to hold your eligible staked crypto assets after opting-in to the staking service before you are able to opt-out.

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 ETH. 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. While we tried to describe the key risks associated with ETH here and in our risk statement, these aren’t all of the risks associated with trading in ETH. You should also do your own research on ETH to make sure you are comfortable investing in it.

Risks specific to staking ETH

Prior to staking your crypto assets, you acknowledge that:

• given the volatility of crypto assets, the value of your staked ETH 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 ETH;
• 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 ETH if the validator does not perform as require 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 ETH 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 ETH. 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 ETH, Ndax assesses whether ETH 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 ETH (such as how it was created and its governance structure), its characteristics, its market capitalization and any regulatory concern regarding ETH. Based on its assessment, Ndax concluded that ETH 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 ETH from trading on the Platform and stop any future trading of Crypto Contracts based on ETH, and users holding ETH may be required to liquidate their positions, potentially at a significant loss. In this event, users holding positions in ETH 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 ETH.

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

Last Updated: August 17, 2026