OVERVIEW

No securities regulatory authority in Canada has expressed an opinion about Bitcoin or its classification as a security and/or derivative. 1Bitcoin Inc. (1Bitcoin.ca) operates as a non-custodial platform that exclusively facilitates the purchase and sale of Bitcoin. It is important to note that changes in applicable law may adversely affect the use, transfer, exchange, or value of Bitcoin, and such changes may occur suddenly and without notice.

BACKGROUND

In 2008, an anonymous individual or group known as Satoshi Nakamoto introduced Bitcoin, a decentralized digital currency, through the Bitcoin Whitepaper. Bitcoin was officially launched as open-source software in 2009, marking the beginning of a new era in digital currency. Bitcoin operates without reliance on any central authority, allowing direct peer-to-peer transfers between users over the Bitcoin network without the need for intermediaries. Transactions are validated by network nodes using cryptographic techniques and recorded on a transparent, immutable ledger known as the blockchain.

Unlike other cryptocurrencies, Bitcoin does not have a centralized development team. Instead, it is maintained and developed by a decentralized community of contributors. New Bitcoins are introduced into circulation through a “Proof-of-Work” process, wherein computers compete to solve complex mathematical puzzles. The first computer to solve the puzzle is rewarded with newly minted bitcoins, a process commonly referred to as “mining.” For more detailed information on Bitcoin as both an asset and a technology, we encourage you to explore the resources available on our website.

DUE DILIGENCE

Prior to the launch of 1Bitcoin.ca as a non-custodial platform, thorough due diligence was conducted, concluding that Bitcoin is unlikely to be considered a security or derivative under Canadian securities legislation. This analysis included a review of several key factors, such as:

(i) The liquidity and market depth of the national and global Bitcoin markets, including the total market capitalization, supply, demand, and Bitcoin’s maturity as an asset;

(ii) The decentralized nature of Bitcoin's creation, governance, usage, and design, including its source code, security features, and ongoing development by a global community of contributors;

(iii) The technical risks associated with Bitcoin, including potential code defects, security vulnerabilities, and other threats to the Bitcoin blockchain, such as susceptibility to hacking or the impact of potential forks;

(iv) The classification of Bitcoin by Canadian jurisdictions and other relevant international jurisdictions, particularly concerning whether Bitcoin is considered a security or derivative; and

(v) The legal and regulatory risks associated with Bitcoin, including any ongoing or potential civil, regulatory, or enforcement actions related to its issuance, distribution, or use. This also includes statements from Canadian securities regulators or other international regulators regarding the classification of Bitcoin or similar crypto assets.

ADDITIONAL RISKS AND INFORMATION

As with all cryptocurrencies, Bitcoin carries inherent risks. These risks include, but are not limited to, volatility, liquidity challenges, limited historical data, demand fluctuations, the potential for forks, coding imperfections, regulatory uncertainties, and vulnerabilities associated with electronic trading and cybersecurity. For further details on the risks associated with cryptocurrencies, please refer to the 1Bitcoin.ca Platform Risk Statement.

This Crypto Asset Statement is not intended to be exhaustive of all risks associated with buying and selling Bitcoin. We strongly encourage you to conduct your own due diligence and carefully consider whether trading Bitcoin is appropriate for your financial situation and risk tolerance.Crypto Asset Statement for Bitcoin

Last updated on August 24th, 2024

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