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Pudgy Penguins (PENGU) Crypto Asset Statement

Pudgy Penguins (PENGU) Crypto Asset Statement

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

Description of PENGU

History of PENGU

PENGU (Pudgy Penguins) is a memecoin launched on the Solana blockchain in late 2024 and branded around the popular Pudgy Penguins NFT IP. It is presented publicly as the “official coin” of Pudgy Penguins within the Solana ecosystem. Trading history and listing data on major trackers begin in December 2024, with the token quickly gaining liquidity and community attention alongside broader Solana memecoin activity. Total token supply is set at 88.88 billion PENGU, with circulating supply reported in the mid-tens of billions as markets matured through early 2025.

 
What is PENGU used for

PENGU is primarily a community and culture token centered on the Pudgy Penguins brand. Its current use revolves around community engagement, trading/speculation, and participation in ecosystem campaigns or promotions that may be organized by partners or community contributors. There is no protocol-level utility (e.g., on-chain governance of a base protocol) publicly documented for PENGU at this time, and any auxiliary uses tend to be social or promotional rather than tied to core network functionality.

 

How PENGU works

PENGU is an SPL token on Solana (i.e., a standard Solana fungible token) and inherits Solana’s high-throughput, low-fee settlement properties. The token’s supply is fixed at 88,880,000,000 PENGU, with circulating supply and market metrics reported by major aggregators; contract information and chain designation (Solana) are also disclosed on those aggregators. PENGU does not natively confer rights in a base protocol (such as validator staking or L1 governance); rather, it functions as a brand-aligned memecoin where value is primarily driven by market demand, community activity, and association with the Pudgy Penguins IP.

 

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 PENGU. Each of these risks are 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.

In addition to the general risks set out in the Risk Statement, we also point out other specific risks to PENGU below.

  • Brand/Association Risk: PENGU’s value is closely tied to the Pudgy Penguins brand and its social momentum. Any negative developments affecting the brand, confusion about “official” affiliations, or IP/branding disputes could materially affect demand and price.
  • Limited intrinsic utility: PENGU presently has no protocol-level functionality (e.g., L1 staking or base-protocol governance). Price formation is therefore more dependent on speculative trading and community sentiment than on fundamental on-chain cash flows or utility.
  • Concentration and liquidity dynamics: As with many memecoins, holdings may be concentrated among a subset of wallets; large sales by concentrated holders can increase volatility. Liquidity conditions can change rapidly, especially across Solana venues, which may lead to slippage in stressed markets. (Generalized from typical memecoin market structure.).
  • Evolving Disclosures: Information about token allocations, mint/freeze authority settings, and third-party integrations on Solana may evolve or be clarified over time; lack of standardized, project-maintained technical documentation can increase disclosure risk (Generalized Solana token operational risk).

While we have tried to describe the key risks associated with PENGU 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 PENGU. You should also do your own research on PENGU 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 PENGU, Ndax assesses whether PENGU 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 PENGU (such as how it was created and its governance structure), its characteristics, its market capitalization and any regulatory concern regarding PENGU. Based on its assessment, Ndax concluded that PENGU 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 PENGU from trading on the Platform and stop any future trading of Crypto Contracts based on PENGU, and users holding PENGU may be required to liquidate their positions, potentially at a significant loss. In this event, users holding positions in PENGU 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 PENGU.

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

Last Updated: 8/8/2025