XLM Risk

Stellar Lumens (XLM)

INTRODUCTION
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‍There has been no expressed opinions by a regulatory authority in Canada about Stellar Lumens or any of the other Crypto Contracts or Crypto Assets made available through Satstreet Inc., including an opinion that Stellar Lumens 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 Stellar Lumens 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

Stellar is a decentralized blockchain platform designed for fast, low-cost cross-border payments and asset transfers. Launched in 2014 by Jed McCaleb, co-founder of Ripple, Stellar aims to facilitate financial inclusion and provide a seamless way for individuals and institutions to send money globally. Stellar's native cryptocurrency, Lumens (XLM), serves as a bridge currency, allowing for easy conversion between different fiat currencies and facilitating quick transactions on the network.

Stellar operates on a unique consensus protocol called the Stellar Consensus Protocol (SCP), which enables fast transaction confirmation times and high scalability. It also incorporates a decentralized exchange within the network, allowing users to trade and convert different assets directly on the platform. Stellar has partnered with various financial institutions and organizations, enabling seamless integration with existing financial systems and providing access to global payment networks.

Stellar has gained recognition for its focus on financial inclusion and its ability to provide affordable and efficient cross-border transactions. By leveraging blockchain technology, Stellar aims to revolutionize the traditional remittance and payments industry, making it accessible to individuals and businesses worldwide.
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Stellar (XLM) : https://www.stellar.org/papers/stellar-consensus-protocol?locale=en
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RISKS OF XLM

Any investment in cryptocurrency and digital assets, such as XLM, 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, XLM has no central working group or authority to disclose material information to the public regarding XLM. 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 XLM. We encourage all users to perform their own due diligence to assess the risks associated with XLM and to determine whether this level of risk is acceptable to them. Neither XLM nor Satstreet guarantees the value of XLM, and holders of XLM will not have any recourse to XLM or Satstreet if the value of XLM declines for any reason whatsoever.

SATSTREET EVALUATION OF XLM

Satstreet Inc. has reviewed and assessed XLM prior to making it available through our services and has concluded that XLM 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 XLM 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 XLM, including an opinion that XLM is not itself a security and/or derivative. Based on publicly available information Satstreet has reviewed XLM, including, but not limited to, a review of the following: The creation, governance, usage, and design of XLM, including the source code, security, and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that created XLM. The supply, demand, maturity, utility, and liquidity of XLM. Material technical risks associated with XLM, including any code defects, security breaches and other threats concerning XLM 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 XLM, including (i) any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of XLM, 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 XLM about whether XLM, 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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