Litecoin (LTC) - Crypto Asset Statement

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

Description of LTC

History of LTC

Litecoin (LTC), like many other altcoins, was developed to tackle the shortcomings of the first cryptocurrency, Bitcoin. It takes approximately 10 minutes to mine one new block of transactions on the Bitcoin network. Litecoin was proposed as a Bitcoin spinoff that would increase the transaction speed and solve the network’s scalability issue.

Charles Lee, a crypto pioneer and a former Google and Coinbase employee, launched Litecoin in 2011. Litecoin was able to reduce the block confirmation time from 10 minutes to only two and a half minutes.

What is LTC used for

Litecoin (LTC) has the same use-cases as the first and the largest cryptocurrency, Bitcoin. It is a global peer-to-peer payment network that uses LTC as its native currency. Anyone on the internet can use Litecoin to make fast and secure payments without relying on a bank or financial service provider. Today, many online as well as brick and mortar stores accept Litecoin payments.

How LTC works

Similar to Bitcoin, Litecoin runs on the proof-of-work consensus protocol. But it uses the Scrypt hash algorithm instead of SHA-256 to increase the transaction speed of LTC.

Litecoin has a limited supply of 84 million LTC coins. New coins are mined with every new block of transactions that is added to the network. At launch, the Litecoin network offered 50 LTC to the miners who mined the blocks.

But the network automatically halves the mining rewards after every 840,000 new blocks, which happens approximately every four years. The network will continue to halve the rewards until all 84 million coins are mined.

Litecoin undergoes periodic “halving” events, during which the block reward paid to miners for validating transactions is reduced by 50%. These events occur automatically at predetermined intervals defined by the Litecoin protocol and are designed to control the issuance of new LTC over time. As a result, the rate at which new Litecoin enters circulation decreases with each halving event.

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

Concentration of LTC Holdings

The largest LTC addresses hold a very large portion of the LTC currently outstanding. Market volatility may result when large holders of LTC decide to sell significant amounts of their LTC positions.

Decrease in Block Reward

A LTC halving is an event where the block reward for mining new LTC is reduced by 50%, meaning that LTC miners receive half the amount of LTC for validating new blocks and helping secure the network. LTC halving occurs every 840,000 blocks, which historically has resulted in a halving approximately once every four years.

Several halving events have already occurred on the Litecoin network, each reducing the block reward and affecting miner economics. Future halving events are expected to continue at regular intervals in accordance with the Litecoin protocol.

Following past halving events, some miners have reduced or ceased their mining activities due to lower rewards. If the LTC network were to experience a significant decline in miner participation, transaction processing speeds could be affected and the network could become more vulnerable to security risks, including the possibility of a 51% attack.

Conflict of Interest Disclosure

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

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

Last Updated: August 14, 2026