USDC Risk

USDC (USDC)

INTRODUCTION
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‍There have been no expressed opinions by a regulatory authority in Canada about USDC or any of the other Crypto Contracts or Crypto Assets made available through Satstreet Inc., including an opinion that USDC itself is not a security and/or derivative. There may be sudden changes without notice to applicable laws that may adversely affect the value, use, transfer, or exchange of any of your crypto assets. 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 Crypto Asset Statement or the Satstreet Inc. Services Risk Statement. The below provides a summary of risks associated with USDC and is not a complete list of all risks and does not take into account an individual’s specific risk tolerance or situation. Investors are encouraged to conduct their own research prior to trading any crypto asset. Satstreet Inc. clients should read the Satstreet Inc. Services Risk Statement for the general risks associated with crypto assets made available through Satstreet Inc.
A copy of the Satstreet Services Risk Statement is available at https://satstreet.com/services/risk-statements
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DESCRIPTION

Launched in late 2018, USD Coin (USDC) was created by a partnership between crypto asset exchange Coinbase and the financial services provider Circle known as the “CENTRE Consortium” (CENTRE) as a way of “tokenizing” US dollars on a blockchain. CENTRE develops and maintains the technology and the governing framework of USDC. The reason for creating USDC was that sending these tokenized dollars across a blockchain network was faster, cheaper and more efficient than sending US dollars through a traditional banking system. USDC is running on Ethereum (as an ERC20 token) as well as a few other other major protocols. USDC is focused on maintaining a value that is pegged 1:1 to the US dollar. USDC is also found on multiple public blockchains, including Ethereum, Solana, Algorand, Stellar and Tron. Each USDC is designed to be backed by one US dollar, or an asset with an equivalent value. Satstreet does not support or guarantee USDC’s peg to the US dollar. Changes in supply and demand of stablecoins may cause stablecoins (including USDC) to move off their peg. USDC is created when a user sends US dollars to the token issuer’s bank account and interacts with the smart contract on the blockchain that the user wants to use. When a holder of USDC redeems USDC, the process is reversed and the equivalent amount of USDC is “burned” and removed from circulation and the funds underlying USDC’s reserves are transferred to the holder’s external bank.
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USDC (USDC) : https://www.circle.com/en/usdc
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RISKS OF USDC

Any investment in cryptocurrency and digital assets, such as USDC, can include the following general risks:(i) volatility risk and liquidity risk(ii) short history risk(iii) demand risk(iv) forking risk(v) code defect risk(vi) regulatory risk(vii) electronic trading risk(viii) cyber security risk

For additional information of risks associated with cryptocurrency and digital assets, you may refer to the Satstreet Inc Services Risk Statement. In terms of specific risks, USDC has no central working group or authority to disclose material information to the public regarding USDC. Please note that these risks and the associated summaries or overviews provided for each herein are not intended to be a complete overview of all such risks and, in addition, there may be other risks that come with exposure to USDC. We encourage all users to perform their own due diligence to assess the risks associated with USDC and to determine whether this level of risk is acceptable to them. Neither USDC nor Satstreet guarantees the value of USDC, and holders of USDC will not have any recourse to USDC or Satstreet if the value of USDC declines for any reason whatsoever.

SATSTREET EVALUATION OF USDC

Satstreet Inc. has reviewed and assessed USDC prior to making it available through our services and has concluded that USDC is not a security or derivative under Canadian securities legislation; however, there is a risk that this conclusion could change in the future and that, in such event, Satstreet will be required to halt, suspend, and then remove USDC from its platform as described in the Satstreet Inc. Services Risk Statement.

Further, as indicated above, no Canadian securities regulatory authority has expressed an opinion about USDC, including an opinion that USDC is not itself a security and/or derivative. Based on publicly available information Satstreet has reviewed USDC, including, but not limited to, a review of the following: The creation, governance, usage, and design of USDC, including the source code, security, and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that created USDC. The supply, demand, maturity, utility, and liquidity of USDC. Material technical risks associated with USDC, including any code defects, security breaches and other threats concerning USDC and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them. Legal and regulatory risks associated with USDC, including (i) any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of USDC, and (ii) statements made by any securities regulatory authorities in Canada, other regulators in IOSCO-member jurisdictions, or the regulator with the most significant connection to USDC about whether USDC, or generally about whether the type of crypto asset, is a security and/or derivative.

Last Updated: June 2023

Risk Statements

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