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 Kyber Network Crystal (“KNC”). We created this summary to help you understand the basics of KNC as well as some of the risks involved in acquiring it. While we tried to describe the key features of KNC 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 KNC to make sure you are comfortable acquiring it.
Description of KNC
KNC is an Ethereum-based governance token (known as an ERC-20 token) associated with the Kyber Network, which is made up of a set of smart contracts and an application programming interface that facilitate the exchange of crypto assets without relying on a centralized intermediary. The Kyber Network was established in 2017 by Lori Luu and Yaron Velner. The Kyber Network is now overseen by the KyberDAO, a decentralized autonomous organization made up of KNC holders who vote on various matters relating to the Kyber Network’s development.
The set of smart contracts comprising the Kyber Network aggregate “liquidity” from a variety of “reserves” in order to make sure that users of the Kyber Network get the best price when exchanging their crypto assets. In this instance, liquidity refers to other holders of crypto assets who are willing to exchange their crypto assets for another person’s crypto assets, and reserves refers to the different places where the Kyber Network goes to seek liquidity. For example, when someone wants to use KyberSwap – the Kyber Network’s associated decentralized exchange – to exchange their crypto assets, the Kyber Network will deploy its smart contracts to determine the best available price from various sources, including publicly available pricing data and other decentralized exchanges.
Holders of KNC are able to stake their KNC to receive trading fees from protocols in the Kyber Network and may also vote on various matters relating to the Kyber Network’s development. As more trades are executed and new protocols are added, more rewards are generated. KNC may also be upgraded, minted or cancelled (or “burned”) as determined by the KyberDAO.
Risks
The strength of KNC is heavily dependent on the strength of the Ethereum network. If the Ethereum network were to experience a serious issue, KNC’s price could significantly decline.
The value of the KNC is dependent on the number of users of the Kyber Network. If there is an interruption or a serious issue with the Kyber Network or KyberSwap, including an exploit or hack of the network or the decentralized exchange, the value of KNC could be adversely affected.
Like other crypto assets, there are also some general risks associated with acquiring KNC. 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. While we tried to describe the key risks associated with KNC here and in our risk statement, these aren’t all of the risks associated with trading in KNC. You should also do your own research on KNC to make sure you are comfortable acquiring it.
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 KNC 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 KNC, including an opinion that KNC is not itself a security and/or derivative.