Legal/
Crypto Asset Statements/
Internet Computer Protocol (ICP) - Crypto Asset Statement

Internet Computer Protocol (ICP) - Crypto Asset Statement

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

Description of ICP

History of ICP

Internet Computer Protocol (“ICP”) is the native utility and governance token of the Internet Computer blockchain, an open source project initiated by the DFINITY Foundation in 2017. After several public and private test-net phases, the network’s “Genesis” launch occurred on 18 December 2020, followed by the public release of token transfers and exchange listings on 10 May 2021. At launch, approximately 469 million ICP were created, distributed among early contributors, the DFINITY Foundation, community airdrops, and the Internet Computer ecosystem fund. Since genesis, the protocol has introduced notable milestones such as the Network Nervous System (NNS) for on-chain governance, seamless WebAssembly (“canister”) smart contracts, and integrations enabling Bitcoin and Ethereum interoperability.

What is ICP used for

ICP serves three core functions within the Internet Computer ecosystem. First, holders can stake ICP in the NNS to create “neurons,” which grant proportional voting power over protocol upgrades, economic parameters, and treasury allocations; stakers earn governance rewards in ICP. Second, ICP can be converted into “cycles,” a stable-value computational resource that pays for canister smart-contract execution and storage—burning ICP in the process and exerting deflationary pressure. Third, ICP is distributed as incentives to node providers that supply hardware and to developers who build applications selected by community voting, aligning all participants through token-denominated rewards.

How ICP works

The Internet Computer operates a unique proof-of-useful-work architecture in which anonymized, independently owned data centre nodes form subnets that validate canister activity. ICP tokenomics combine inflationary governance rewards with deflationary cycle conversions. Staking ICP into a neuron locks the tokens for a user-chosen “dissolve delay” of six months to eight years; longer lock-ups increase voting weight and reward rate while removing ICP from circulating supply. Governance rewards are minted continuously, currently targeting an annualized inflation of roughly 4% to 6% that gradually decreases as more tokens are locked. When developers or users convert ICP to cycles, new cycles are minted and the corresponding ICP is permanently burned, offsetting inflation. This dual mechanism incentivizes long-term participation while maintaining a sustainable resource economy for decentralized applications.

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 ICP. 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 ICP may include the following:

  • Governance Concentration – Although governance is on-chain, a significant portion of voting power is controlled by early-stage neurons with long dissolve delays, meaning protocol changes may be influenced by a relatively small group for several years.
  • Complex Tokenomics – ICP’s inflation-and-burn model depends on sustained demand for cycles and continued staking participation; reduced developer activity or mass neuron dissolves could increase circulating supply and exert downward price pressure.
  • Node-Provider Dependence – The network relies on a limited set of approved data-centre operators; operational failures, regulatory actions, or economic stress on these providers could impair subnet reliability and network performance.
  • Regulatory Uncertainty – ICP’s on-chain governance rewards may be scrutinized under evolving securities-law frameworks, potentially affecting exchange availability or token utility in certain jurisdictions.
  • Technical Novelty – Features such as chain-key cryptography, canister architecture, and direct Bitcoin integration are relatively new and may contain undiscovered vulnerabilities that could lead to loss of funds or prolonged outages.

While we have tried to describe the key risks associated with ICP 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 ICP. You should also do your own research on ICP to make sure you are comfortable investing in such a crypto asset.

Conflict of Interest Disclosure 

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

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

Last Updated: August 17, 2026