Crypto Asset Statement - Chiliz (CHZ)

NO SECURITIES REGULATORY AUTHORITY IN CANADA OR ANY OTHER JURISDICTION HAS EXPRESSED AN OPINION ABOUT CRYPTO CONTRACTS OR ANY OF THE CRYPTO ASSETS MADE AVAILABLE THROUGH THE PLATFORM (as hereinafter defined), INCLUDING AN OPINION THAT THE CRYPTO ASSETS ARE NOT THEMSELVES SECURITIES AND/OR DERIVATIVES.

Coinberry is offering Crypto Contracts in reliance on a prospectus exemption contained in the exemptive relief decision Re Coinberry Limited dated August 19th 2021 [link]. 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 Statement of Crypto Asset and Crypto Contract Risks.

About this Statement

Coinberry (“Coinberry” 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 the Chiliz Token (“CHZ”). We created this summary to help you understand the basics of CHZ as well as some of the risks involved in acquiring it. While we tried to describe the key features of CHZ 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 CHZ to make sure you are comfortable acquiring it. 

Description of CHZ

CHZ is a utility token for the fan engagement and reward platform offered through Socios.com. CHZ is available as an Ethereum-based token (known as an ERC-20 token) or as a BEP-2 token on the Binance Smart Chain (Bitbuy users are currently able to acquire the ERC-20 version of CHZ via the Platform). The company that created CHZ was founded by Alexandre Dreyfus in 2018.

Holders of CHZ are able to purchase “Fan Tokens” through Socios.com. Fan Tokens are ERC-20 tokens. When they partner with Socios.com, sports franchises complete a “Fan Token Offering” (or “FTO”), meaning they sell a finite number of Fan Tokens associated with their team. Fan Tokens give their holders the right to vote on official team polls to help the associated team make particular fan-related decisions. Some examples of choices that Fan Token holders have influenced include: the exterior design of a team’s travel bus, a team’s jersey design, a team’s motto and a team’s warm-up music. Holders of Fan Tokens may also benefit from perks, including exclusive promotions, rewards and experiences. Notable soccer teams like Juventus F.C. and Paris-Saint Germain F.C. have completed FTOs via the Socios.com platform. 

Unlike many other crypto assets, transactions in CHZ are recorded on the blockchain using a proof of authority (“PoA”) consensus mechanism. PoA consensus mechanisms work by allowing a verified set of users confirm new blocks added to the blockchain. As a result, PoA consensus mechanisms are less decentralized than proof of work or proof of stake consensus mechanisms. 

Risks

As an ERC-20 token and BEP20 token, the strength of CHZ is dependent on the strength of the Ethereum and Binance Smart Chain networks, respectively. If either the Ethereum or Binance network were to experience a serious issue, CHZ’s price could decline significantly.

The price of CHZ could also decline in connection with issues related to Socios.com. If users leave Socios.com for a different platform, there could be an adverse effect on the token’s price. This effect could result if competing platforms draw away users from Socios.com or if there is an overall decline in the popularity of sports and entertainment tokens in general.

Like other crypto assets, there are also some general risks associated with acquiring CHZ. 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 CHZ here and in our risk statement, these aren’t all of the risks associated with trading in CHZ. You should also do your own research on CHZ to make sure you are comfortable acquiring it.

How Coinberry Decides to List Crypto Assets

Coinberry 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. 

Risk Statement 

Please make sure to review the Statement of Crypto Asset and Crypto Contract Risks for additional discussion of general risks associated with the Crypto Contracts and Crypto Assets made available on Coinberry.