VeChain (VET) - Crypto Asset Statement

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

Description of VET

History of VET

VeChain was founded in 2015 by Sunny Lu, the former chief information officer (CIO) of Louis Vuitton China. What started as a subsidiary of Bitse, one of China's largest blockchain companies, has grown to become one of the few blockchains that already have built a substantial customer base among established companies.

To date, VeChain has expanded its focus to multi-purpose functionality with customizable support for a range of enterprise use cases. On-chain governance, low transaction fees, interoperability with non-blockchain technologies, and regulatory compliance are all priorities for VeChain’s developers. VeChain wants to make all required information from manufacturing to delivery (storage, transportation, and supply) available to all authorized parties for any enterprise business process, which interacts with the VeChain Thor blockchain.

What is VET used for

VET is the VeChain token that is used to carry value or “smart money” from smart contracts. This means that transactions on decentralized applications occurring on VeChain's blockchain will use VET. It is available for investing by the general public.

This token can transfer value across the blockchain and trigger smart contracts. It is also how users pay for transactions on Dapps that function on the VeChain blockchain.

How VET works

VeChain works by giving physical products a unique identity, usually through RFID (radio frequency identification), QR Codes, or NFC (near-field communication). Sensors record information at every stage of the supply chain, and are recorded and linked to the product's identity.

The Vechain platform contains two distinct tokens: VeChain Token (VET) and VeChainThor Energy (VTHO). The former is used to transfer value across VeChain’s network, and the latter is used as energy or "gas" to power smart contract transactions.

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.

Enterprise adoption risk

VeChain's ecosystem has historically focused heavily on enterprise, real-world asset, supply-chain, and sustainability applications. If adoption of these applications does not grow or existing enterprise usage declines, network activity and demand for VET could be adversely affected.

Consensus and staking transition risk

VeChain has transitioned its consensus and staking architecture through the VeChain Renaissance upgrades, including a move toward delegated proof-of-stake and a new validator and delegation model. Changes to validator participation, staking incentives, or the effectiveness of the updated consensus model could affect network security, decentralization, or participation.

Tokenomics risk

The VeChain ecosystem relies on an economic relationship between VET and VTHO, with VET used for staking and ecosystem participation and VTHO used for transaction fees. Changes to VTHO generation, burning, staking rewards, transaction demand, or other protocol economic parameters could affect the utility or value of VET.

Enterprise and ecosystem dependency risk

VeChain's adoption and market perception may be influenced by the development, continuation, or success of enterprise applications, ecosystem initiatives, and commercial integrations. Failure of significant initiatives to achieve anticipated usage could adversely affect demand for VET.

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

Conflict of Interest Disclosure

Ndax has assessed potential conflicts of interest associated with the offering, and ongoing availability of VET 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 VET. 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 VET, Ndax assesses whether VET 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 VET (such as how it was created and its governance structure), its characteristics, its market capitalization and any regulatory concern regarding VET. Based on its assessment, Ndax concluded that VET 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 VET from trading on the Platform and stop any future trading of Crypto Contracts based on VET, and users holding VET may be required to liquidate their positions, potentially at a significant loss. In this event, users holding positions in VET 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 VET.

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

Last Updated: August 25, 2026