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Stacks (STX) Crypto Asset Statement

Stacks (STX) Crypto Asset Statement

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

Description of STX

History of STX

Stacks originated at Princeton University in 2013 and was first known as “Blockstack.” Following SEC-qualified token offerings in 2017 and 2019, the Stacks 2.0 mainnet launched in January 2021, introducing the Clarity smart-contract language and a unique Proof-of-Transfer (PoX) consensus that anchors Stacks blocks to Bitcoin. The project rebranded from Blockstack to “Stacks” and dissolved its reporting status with the SEC in 2021 as the network became sufficiently decentralized.

What is STX used for

STX is the native token of the Stacks layer that extends Bitcoin with smart contracts and decentralized apps. Holders use STX to pay transaction fees, deploy Clarity contracts, and participate in PoX consensus by “stacking” STX to earn BTC rewards. STX is also the medium of exchange for Minting CityCoins and other ecosystem tokens built atop the Stacks protocol.

 

How FIL works

Stacks employs Proof-of-Transfer, where network miners commit Bitcoin (not electricity-intensive hashing) for the chance to mine new Stacks blocks and receive newly minted STX. The committed BTC is cycled to “stackers” who lock STX for set periods, securing the chain and receiving the BTC payouts. This links Stacks’ security and finality to Bitcoin while enabling faster, programmable transactions on its own layer. STX has a hard-capped supply of 1.818 billion tokens released on a declining-emission schedule through mining rewards that halve roughly every four years.

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 STX. 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.

Specific risks that are unique to the STX token are outlined below. These risks are in addition to the general crypto-asset risks outlined in our Risk Statement:

  • Dependence on Bitcoin: Stacks’ security and reward mechanism rely on the underlying Bitcoin blockchain; disruptions or fee spikes on Bitcoin could impair Stacks functionality.
  • Regulatory classification: Because STX was originally sold under SEC Regulation A+, future U.S. regulatory interpretations could differ and affect exchanges or custodians handling STX.
  • Smart-contract language adoption: Clarity is a new, non-Turing-complete language; limited developer familiarity could slow ecosystem growth versus EVM-compatible chains.
  • PoX economic assumptions: If BTC rewards become insufficient to attract miners or stackers, chain security and liveness might degrade.

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

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

Last Updated: 05/23/2025