Note: Right now this currency is only being offered to select Private Wealth clients. Click here to learn more about our Private Wealth (OTC) team and what they can do for you.
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 through the Platform is Tezos (“XTZ”). We created this summary to help you understand the basics of XTZ as well as some of the risks involved in acquiring it. While we tried to describe the key features of XTZ here, this summary isn’t meant to tell you everything you’d want to know before acquiring it. You should also do your own research on XTZ to make sure you are comfortable acquiring it.
Description of XTZ
XTZ is the native token of the Tezos blockchain (“Tezos”). Tezos is an open-source platform for assets and decentralized applications that allows XTZ holders to vote on developer-proposed upgrades to its core protocol.
Tezos was created by husband and wife Arthur and Kathleen Breitman in 2014 through their corporation, Dynamic Ledger Solutions. Following XTZ’s initial coin offering, the Tezos Foundation, an arm’s length Swiss foundation, took control of the proceeds. The Tezos Foundation’s stated mission is the promotion of Tezos through grants and other capital deployment vehicles.
Tezos is primarily known for its on-chain governance and its proof-of-stake consensus protocol. These features are intended to mitigate forks by allowing XTZ holders to vote on proposed amendments to the platform. Tezos’ proof-of-stake consensus protocol is a delegated proof-of-stake (“DPoS”) consensus protocol. Through Tezos’ DPoS consensus protocol, anyone who owns XTZ can help operate the platform by: (i) locking (or “staking”) their XTZ in a smart contract, allowing them to delegate their tokens to a specific validator; or (ii) becoming a validator themselves by staking at least 8,000 XTZ. For their part, Tezos’ validators help the platform function by validating blocks on the blockchain and by voting on governance proposals. XTZ holders receive a reward for participating in the DPoS consensus protocol, with the validators receiving a small percentage of the reward allocated to those who delegate their XTZ.
Like Ether, the native token of the Ethereum network, XTZ can function as a means of exchange and/or a store of value, with its value also being influenced by the additional use cases associated with its network. XTZ is also valuable because of its ability to be staked in exchange for rewards.
Like other crypto assets, there are some general risks associated with acquiring XTZ. 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 XTZ below. While we tried to describe the key risks associated with XTZ here and in our risk statement, these aren’t all of the risks associated with trading in XTZ. You should also do your own research on XTZ to make sure you are comfortable acquiring it.
The success of Tezos is predicated on developers choosing to build and use Tezos-native applications. There is significant competition between crypto asset networks seeking to offer open, programmable smart contracts platform for decentralized applications. The price of XTZ is likely to decline in the long run if constructive and meaningful applications are not created, supported and used on Tezos.
Downtime on Early Development
Legal disputes among the creators of Tezos caused delays in the development of the network prompting investors to take legal action. As a result, Tezos offered investors the opportunity to receive a refund of their investment. Although a settlement was recently reached, these events caused prices of XTZ to be extremely volatile and highly speculative. XTZ may be more prone to price fluctuations due to its development history.
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.
Bitbuy is offering crypto contracts to purchase and sell XTZ in reliance on a prospectus exemption contained in the exemptive relief decision Re Bitbuy Technologies Inc. dated November 30, 2021. 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 XTZ, including an opinion that XTZ is not itself a security and/or derivative.