About this Statement
Bitbuy Technologies Inc. (“Bitbuy” or “we”) believes that our users should understand the crypto assets that they are able to trade using our crypto trading platform (the “Platform”). One of the crypto assets we offer on the Platform is Hedera (“HBAR”). We created this summary to help you understand the basics of HBAR as well as some of the risks involved in trading it. While we tried to describe the key features of HBAR here, this summary isn’t meant to tell you everything you’d want to know before investing in HBAR. You should also do your own research on HBAR to make sure you are comfortable investing in it.
About Hedera
Hedera is a blockchain platform, which is open-source, that has its own cryptocurrency, called HBAR. The Hedera Network can be used to create tokens natively, and it also supports arbitrary Smart Contracts written in Solidity (similar to the larger Ethereum network). Hedera leverages a proprietary “hashgraph” consensus model which it claims allows higher total throughput of transactions on the network. The network is secured via a proof of stake protocol.
HBAR tokens were initially sold via Simple Agreement for Future Tokens (SAFT) open to insiders, advisors, friends and family in December 2017. Another SAFT round took place in Q1 2018. A third SAFT sale occurred in August 2018, and was only open to accredited investors.1 The genesis block of the chain was not produced until September 13th, 2019.
Risks
Like other crypto assets, there are some general risks associated with investing in HBAR. We describe many of these general risks in the risk statement we publish on our website, including risks relating to: (i) volatility; (ii) access, loss or theft, (iii) control of processing power; (iv) settlement of transactions on crypto asset networks; (v) momentum pricing; (vi) private keys; (vii) internet disruptions; (viii) faulty code; (ix) network development and support; (x) regulatory risk; (xi) network forks; (xii) air drops; (xiii) voting rights; (xiv) cybersecurity incidents and other systems and technology problems; and (xv) unforeseeable risks. We also point out some risks that are specific to HBAR below. While we tried to describe the key risks associated with HBAR here and in our risk statement, these aren’t all of the risks associated with trading in HBAR. You should also do your own research on HBAR to make sure you are comfortable investing in it.
Governance By Private Council
Hedera has a group of 39 large companies and funds which govern the token and network development called the Hedera council. Token holders do not get to vote for governance changes. At the time of writing, only 31 of those council seats were filled. A complete and current list of council members can be found here: https://hedera.com/council.
Petition by HBAR holders regarding declining price
In February 2024 a petition was launched by HBAR holders to the governance group of Hedera Hasgraph, expressing dissatisfaction and concern about the declining price of HBAR.2 The petition mentioned trust in the governance group comprising of large, multi-national corporations like Google, IBM, Boeing, and others, which has proved to not have a positive effect on the price of HBAR. The petition outlines 13 action items that might help restore the price of HBAR. Investors should be aware of this petition when evaluating HBAR.
How Bitbuy Decides to List Crypto Assets
Bitbuy reviews crypto assets before making them available for trading on the Platform. In making our decision to list a new crypto asset, we consider publicly-available information about the crypto asset, including (among other things) its creation, design, governance, usage, supply, demand, maturity, utility, liquidity, material technical risks and legal and regulatory risks.
To date, we have only made crypto assets available for trading on the Platform which have significant supply, demand and liquidity. In our experience, crypto assets with these qualities tend to also satisfy the other criteria we evaluate as part of our review. That being said, our review process is fulsome and flexible, and we don’t prioritize any one factor over another. You should review the risk statement published on our website for more information about our procedures for determining whether to make a crypto asset available for trading on the Platform.
Regulatory Information
Bitbuy is offering crypto contracts to purchase and sell in reliance on a prospectus exemption contained in the exemptive relief decision Re Bitbuy Technologies Inc. dated November 30th, 2023. The statutory rights of action for damages and the right of rescission in section 130.1 of the Securities Act (Ontario) and similar legislation in the other provinces and territories of Canada would not apply in respect of a misrepresentation in this Statement.
No Canadian securities regulatory authority has expressed an opinion about HBAR, including an opinion that HBAR is not itself a security and/or derivative.
References:
- “[SAFT] How did Hedera raise funds?” Hedera. 2021. https://help.hedera.com/hc/en-us/articles/360007219337--SAFT-How-did-Hedera-raise-funds
- Suyu Moma. “Petition to Hedera Hashgraph LLC. & affiliated organisations to restore the price of HBAR” Change.org. February 12, 2024. https://www.change.org/p/petition-to-hedera-hashgraph-llc-affiliated-organisations-to-restore-the-price-of-hbar
Last updated: Feb 23, 2024