Hedera (HBAR) - Crypto Asset Statement

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

Description of HBAR

History of HBAR

Leemon Baird, the co-founder of Swirlds Inc and a former Computer Science Professor, founded Hashgraph technology in 2016. However, the project "Hedera Hashgraph" was launched in 2018 in partnership with Mance Harmon, who helped Leemon develop the proof of concept, commercialize Hashgraph to implement in private businesses, and battle-test it in permissioned environments.

The new form of distributed ledger technology promised to process upwards of 2,510,000 transactions per second. This is in stark contrast to blockchains that were struggling to process even 10 or 20 transactions per second at that time.

In 2017, Swirlds raised its seed investment round to bootstrap the development of Hedera. A year later, the project's mainnet went live. Hedera Governing Council now includes over seventeen companies, including Boeing, Google, IBM, Tata Communications, and LG Electronics, to name a few.

The native token of Hedera Hashgraph, HBAR was launched in Sep 2019.

What is HBAR used for

The Hedera Hashgraph protocol comprises four primary services which work together to allow the transfer of value, the development and deployment of smart contracts, and file transfers. The platform also offers consensus services for getting quick, fair, and secure consensus in any application built on top of Hedera Hashgraph.

The network uses a utility token called HBAR, which fuels services like smart contracts, transactions, and file storage. The token also helps secure the network as token holders can stake their tokens to maintain the integrity of the network. Furthermore, HBAR holders can use it to access Hedera Hashgraph-based distributed application.

How HBAR works

Hedera Hashgraph works on two protocols called "Gossip about Gossip" and "Virtual Voting" to achieve speed, efficiency, and high security.

The platform's governance works uniquely. It is divided into two tiers: Open Consensus and The Governing Board. The Open Consensus governs how nodes can connect to become part of Hedera's hashgraph. The Governing Board, on the other hand, is a centralized control system.

To access distributed apps on Hedera, developers need HBAR tokens to pay for network services. Nodes can also use HBAR for staking and get compensation for providing bandwidth, compute, and storage.

HBAR has a maximum supply of fifty billion units. About two billion HBAR tokens are allocated to its two founders over a six year vesting schedule.

Certain Staking Services Terms

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

In addition to the other staking terms that you agree to when you opt-in to our staking services, please consult the table below for additional terms that currently apply to the staking service for particular crypto assets at this time. Note that the annual percentage yield (“APY”) is an estimate, 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 HBAR. 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 HBAR below. While we tried to describe the key risks associated with HBAR here and in our risk statement, these aren’t all of the risks associated with trading in HBAR. You should also do your own research on HBAR to make sure you are comfortable investing in it.

Risks specific to staking HBAR

Prior to staking your crypto assets, you acknowledge that:

• given the volatility of crypto assets, the value of your staked HBAR 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 HBAR; 
• 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 HBAR 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 HBAR 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 HBAR. 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 HBAR, Ndax assesses whether HBAR 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 HBAR (such as how it was created and its governance structure), its characteristics, its market capitalization and any regulatory concern regarding HBAR. Based on its assessment, Ndax concluded that HBAR 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 HBAR from trading on the Platform and stop any future trading of Crypto Contracts based on HBAR, and users holding HBAR may be required to liquidate their positions, potentially at a significant loss. In this event, users holding positions in HBAR 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 HBAR.

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

Last Updated: August 14, 2026