Bitcoin (BTC) - Crypto Asset Statement
PLEASE READ THIS CAREFUL. BY PROCEEDING TO TRANSACT BTC, YOU ACKNOWLEDGE AND ACCEPT THE STATEMENTS SET OUT BELOW.
About this Summary
Ndax 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 BTC. We created this summary to help you understand the basics of BTC as well as some of the risks involved in trading it. While we tried to describe the key features of BTC here, this summary isn’t meant to tell you everything you’d want to know before investing in BTC. You should also do your own research on BTC to make sure you are comfortable investing in it.
Description of BTC
History of BTC
Bitcoin was developed at the peak of the global financial crisis in 2008 by the pseudonymous Satoshi Nakamoto. It was launched officially in January 2009. The first Bitcoin transaction was worth 10 BTC that Satoshi Nakamoto sent to Hal Finney, a developer and early Bitcoin adopter.
What is BTC used for
Bitcoin is used as a means of payment and a store of value. It provides a hassle-free, disintermediated payment system for everyone across the globe. Today, Bitcoin is accepted across a wide range of online and brick and mortar stores, travel websites, gaming platforms, and many other places.
Retail and institutional investors also very often use Bitcoin as an investment asset.
How BTC works
The Bitcoin network is decentralized, meaning no central entity operates it. Instead, the network relies on thousands of blockchain nodes spread throughout the globe. These nodes store the transaction records, approve new transactions, add new blocks, and maintain the network’s integrity.
The network’s collective reliance on so many nodes distributed throughout the world makes the process decentralized and free of any manual errors or manipulation. The blockchain nodes are also often called Bitcoin miners.
Whenever users send new transactions to the Bitcoin network, the network creates a cryptographic puzzle whose solution can only be found by random guessing. The Bitcoin miners deploy high computing power devices to run thousands of probable solutions per second to find the right solution.
Once a miner solves the puzzle, they share the solution with the rest of the miners. If a majority of the miners approve the solution, the network executes the transaction and records it on the blockchain.
The network rewards freshly mined Bitcoins to the first miner who solves the cryptographic puzzle and adds the new block of transactions to the network.
What is Bitcoin halving?
The Bitcoin network rewards its miners with freshly mined Bitcoin (BTC) to approve new transactions and add new blocks. In the early days of Bitcoin, when the price of Bitcoin was almost negligible, the network rewarded its miners with 50 BTC.
Bitcoin halving is the process through which the Bitcoin network halves the mining rewards it offers to miners. The halving process is hardcoded into the network, and it occurs automatically after 210,000 new blocks are added to the Bitcoin blockchain. As one block takes approximately 10 minutes to mine, it takes almost four years to mine 210,000 new blocks. Therefore, it is often said that Bitcoin halving occurs every four years.
The previous Bitcoin halving occurred on May 11, 2020, reducing the mining reward from 12.5 BTC to 6.25 BTC per block. The most recent, and fourth, Bitcoin halving occurred on April 20, 2024 (UTC) at block height 840,000, reducing the block reward from 6.25 BTC to 3.125 BTC per block.
Is there a supply cap on Bitcoin?
There is only 21 million bitcoin that can be mined in total. Once bitcoin miners have mined all 21 million Bitcoin, the supply will be tapped out.
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 BTC. 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 BTC below. While we tried to describe the key risks associated with BTC here and in our risk statement, these aren’t all of the risks associated with trading in BTC. You should also do your own research on BTC to make sure you are comfortable investing in it.
Scalability
As the use of the Bitcoin Network increases without a corresponding increase in throughput of the networks, average fees and settlement times can increase significantly. Increased fees and decreased settlement speeds could preclude certain use cases for bitcoin and can reduce the demand for and price of bitcoin. There is no guarantee that any of the mechanisms in place or being explored for increasing the scale of settlement of transactions in bitcoin will be effective, or how long these mechanisms will take to become effective.
Concentration of Bitcoin Holdings
The largest bitcoin addresses hold a very large portion of the bitcoin currently outstanding. Market volatility may result when large holders of bitcoin decide to sell significant amounts of their bitcoin positions.
Significant Energy Consumption
Because of the significant computing power required to mine bitcoin, the network’s energy consumption as a whole may ultimately be deemed to be or indeed become unsustainable (barring improvements in efficiency which could be designed for the protocol). This potential unsustainability could pose a risk to broader acceptance of the network.
Decrease in Block Reward
A bitcoin halving is an event where the block reward for mining new bitcoin is halved, meaning that bitcoin miners will receive 50% less bitcoin for every transaction they verify. Bitcoin halving occurs every 210,000 blocks, which equates to a halving occurring approximately every 4 years. The last halving occurred on May 11, 2020, when the block reward was reduced from 12.5 to 6.25 bitcoin. As the block reward continues to decrease over time, the mining incentive structure will transition to a higher reliance on transaction verification fees in order to incentivize miners to continue to dedicate processing power to the blockchain. If transaction verification fees become too high, the marketplace may be reluctant to use bitcoin.
Conflict of Interest Disclosure
Ndax has assessed potential conflicts of interest associated with the offering, and ongoing availability of BTC 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 BTC. 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 BTC, Ndax assesses whether BTC 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 BTC (such as how it was created and its governance structure), its characteristics, its market capitalization and any regulatory concerns regarding BTC. Based on its assessment, Ndax concluded that BTC is neither a security nor 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 BTC from trading on the Platform and stop any future trading of Crypto Contracts based on BTC, and users holding BTC may be required to liquidate their positions, potentially at a significant loss. In this event, users holding positions in BTC 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 BTC.
No Canadian securities regulatory authority has expressed an opinion about BTC, including an opinion that BTC is not itself a security and/or derivative.
Last Updated: August 11, 2026