XRP (XRP) - Crypto Asset Statement

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

Description of XRP

History of XRP

Ripple's origins date back to 2004, when Ryan Fugger launched RipplePay, a payment network designed to facilitate the secure transfer of value between individuals worldwide. The project predated Bitcoin and sought to provide a more efficient way of moving money across borders.

In 2012, the project was acquired and further developed by Jed McCaleb, Arthur Britto, David Schwartz, and Chris Larsen. The company was initially renamed OpenCoin, then Ripple Labs in 2013, and subsequently Ripple in 2015. During this period, the team developed the XRP Ledger (XRPL), a decentralized blockchain designed to enable fast, low-cost, and scalable payments.

XRP serves as the native digital asset of the XRP Ledger and is intended to facilitate efficient value transfers and support cross-border payment solutions. Transactions on the XRP Ledger typically settle within seconds and are designed to be completed at a low cost compared to traditional payment networks.

What is XRP used for

XRP was established to complement the traditional payments, migrating transactions between databases controlled by financial institutions to a more open ecosystem.

Unlike Bitcoin’s proof-of-work, XRP uses a consensus mechanism to approve a transaction on the network. Therefore, the transaction settlement time for XRP is roughly 4 seconds.

Today, there are reputable financial institutions such as Santander and the Commonwealth Bank of Australia that support XRP on a trial basis, meaning more trust and fewer regulatory challenges.

How XRP works

XRP runs on a Ledger that uses a ledger managed by a network of independently validating servers that compare transaction records. These servers could belong to anyone, including banks and market makers.

Although Ripple’s XRP Ledger has a consensus mechanism and validating servers, it’s still not a blockchain. All of the XRP tokens are pre-mined and are controlled by a smart contract.

The token’s current circulation is over 50 billion, and the company has decided to release a maximum of 1 billion XRP tokens each month, with the total amount capped at 100 billion XRP.

Unused tokens will be shifted back to an escrow account to ensure there will be no possibility of misuse due to an oversupply.

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 XRP. 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 XRP below. While we tried to describe the key risks associated with XRP here and in our risk statement, these aren’t all of the risks associated with trading in XRP. You should also do your own research on XRP 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 XRP 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 XRP. 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 XRP, Ndax assesses whether XRP 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 XRP (such as how it was created and its governance structure), its characteristics, its market capitalization and any regulatory concern regarding XRP. Based on its assessment, Ndax concluded that XRP 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 XRP from trading on the Platform and stop any future trading of Crypto Contracts based on XRP, and users holding XRP may be required to liquidate their positions, potentially at a significant loss. In this event, users holding positions in XRP 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 XRP.

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

Last Updated: August 11, 2026