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The Open Network (TON) Crypto Asset Statement

The Open Network (TON) Crypto Asset Statement

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

Description of TON

History of TON

Telegram unveiled the “Telegram Open Network” in 2018, raising $1.7 billion before halting the project after SEC litigation. In 2020 community developers revived the codebase as The Open Network, launching main-net and renaming the token TON coin. Supply began at 5 billion, with inflation controlled by validator voting.

What is TON used for

TON powers transaction fees, smart-contract execution and on-chain governance. Holders may stake with validators to secure the Proof-of-Stake network and earn block rewards, or participate in ecosystem dApps such as TON DNS, TON Storage and in-app Telegram payments

 

How TON works

The Open Network (TON) secures its ledger with a high-performance Proof-of-Stake system in which a rotating validator set stakes TON coin to produce blocks on a masterchain that anchors the network’s state . Behind the masterchain sit multiple application-specific workchains, each of which can split into up to 260 shardchains, giving TON an “infinite sharding” architecture that parallelises throughput while letting shards merge or split automatically as load changes . Every block contains “vertical” and “horizontal” messages that let shards talk to one another without congesting the base layer, while the TON Virtual Machine executes smart-contract code compiled to TVM byte-code. Jetton—TON’s fungible-token standard—runs at the contract level, so assets such as staked-TON receipts or stablecoins inherit the network’s sharding and fee model automatically. On-chain services (TON DNS for readable addresses, TON Storage for decentralised file hosting and TON Payments for instant transfers) live in separate workchains but settle finality back to the masterchain, giving the ecosystem a modular design that can scale services independently while keeping security unified under a single validator set .

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 TON. 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 associated with TON may include the following:

  • Ongoing SEC issue – The SEC’s prior case against Telegram could resurface if it believes modern TON activity still falls under its jurisdiction.
  • Validator Concentration – A relatively small active set raises centralisation concerns; collusion could threaten network security or censor transactions.
  • Technology – TON’s multi-shard architecture is less battle-tested than Bitcoin or Ethereum, increasing the chance of unforeseen consensus bugs.

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

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

Last Updated: 6/6/2025