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 19, 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 Crypto Asset Statement or the Statement of Crypto Asset and Crypto Contract Risks.
Together with the Statement of Crypto Asset and Crypto Contract Risks, the provisions of which are incorporated herein, this Crypto Asset Statement, lists certain specified risks associated with Shiba Inu. The risks identified in this Crypto Asset Statement and in the Statement of Crypto Asset and Crypto Contract Risks may not be all of the risks related to the Crypto Assets and Crypto Contracts and there may be other additional unknown risks, that may exist. As with any investment, the risks with cryptocurrencies are high and it is important that you understand the risks before you invest.
Shiba Inu is an experiment in decentralized spontaneous community building. Shiba Inu token is the first token and allows users to hold Billions or even Trillions of them. Nicknamed the DOGECOIN KILLER, this ERC-20 ONLY token can remain well under a penny and still outpace Dogecoin in a small amount of time. Popular worldwide, and already up thousands of per cent, the Shiba token (“Shib”) is the first cryptocurrency token to be listed and incentivized on ShibaSwap, a decentralized exchange. It is a token based on the Ethereum blockchain and is listed on 20 exchanges with a sum of 32 active markets.
Coinberry has performed due diligence with respect to Shiba Inu to satisfy itself as to the viability of offering it on the Platform. Our due diligence included, but was not limited to, a review of the following:
- Liquidity of the market
- Total market capitalization
- Timeline since token inception
- Token available for custody with existing custodians
- The current developer ecosystem
- Whether Shiba Inu has been classified as a security or a derivative by any Canadian jurisdiction or the jurisdiction with which Shiba Inu has the most significant connection
Risks Associated with Investing in Shiba Inu
Underlying Value Risk
The mind-boggling gains in Shiba Inu are enough to give any investor a severe case of FOMO, or fear of missing out. But before buying into the hype, investors should understand the pros and cons of investing in Shiba Inu. Shiba Inu has followed Dogecoin's winning meme-friendly branding recipe but without a significant technological advantage at this point, it may thrive or die in the long term largely on the strength of its brand. The average holding period for Shiba Inu investors is just 13 days, according to Coinbase. Hence, if the market speculators and momentum traders start to abandon ship all at once, a pullback could snowball quickly, potentially crushing long-term investors. If these means of valuing Shiba Inu prove to be fundamentally flawed, then the market may undergo an extreme repricing of Shiba Inu, which could have an adverse impact on its price.
Regulation of Shiba Inu
The regulation of Shiba Inu continues to evolve in North America and within foreign jurisdictions, which may restrict the use of Shiba Inu or otherwise impact the demand for Shiba Inu.
Volatility of Shiba Inu
The risks of trading Shiba Inu are high due to the unexpected changes in market sentiments which can lead to sharp and sudden movements in prices. It is not uncommon for the value of Shiba Inu to quickly drop or rise thereby negatively or positively impacting your investment.
Loss of “Private Keys”
The loss or destruction of certain “private keys” (numerical codes required by Coinberry to access its Shiba Inu) could prevent Coinberry from accessing its Shiba Inu. Loss of these private keys may be irreversible and could result in the loss of all or substantially all crypto assets held in trust by Coinberry.
Your Holdings May Become Illiquid
You may not always be able to liquidate your Shiba Inu at a desired price. It may become difficult to execute a trade at a specific price when there is a relatively small volume of buy and sell orders in the marketplace, including on Shiba Inu trading platforms. Unexpected market illiquidity may cause major losses to the holders of Shiba Inu. The large size of Shiba Inu that Coinberry may hold increases the risks of illiquidity by both making the Shiba Inu difficult to liquidate and in liquidating, Coinberry may affect Shiba Inu’s price significantly.
Shiba Inu transfers are not currently supported by Coinberry. Crypto transfers are currently limited to the following coins: BTC, ETH, LTC and XRP (Buy/Sell not supported, existing holdings can be transferred out).
Risks Associated with the Shiba Inu Network
Dependence on Shiba Inu Developers
While many contributors to Shiba Inu’s software are employed by companies in the industry, most of them are not directly compensated for helping to maintain the protocol. As a result, there are no contracts or guarantees that they will continue to contribute to Shiba Inu’s software.
Disputes on the Development of the Shiba Inu Network may lead to Delays in the Development of the Network
There can be disputes between contributors on the best paths forward in building and maintaining Shiba Inu’s software. Furthermore, the miners supporting the network and companies using it can disagree with the contributors as well, creating greater debate. Therefore, the Shiba Inu community often iterates slowly upon contentious protocol issues, which many perceive as prudently conservative, while others worry that it inhibits innovation.
Significant Increase in Shiba Inu Interest Could Affect the Ability of the Shiba Inu Network to Accommodate Demand
One of the most contentious issues within the Shiba Inu community has been around how to scale the network as user demand continues to rise. The debate goes back to the earliest days of Shiba Inu. There are many possible solutions, and most of them boil down to different ideologies on how Shiba Inu should be used. However, it will be important for the community to continue to develop at a pace that meets the demand for transacting in Shiba Inu, otherwise, users may become frustrated and lose faith in the network.
Attacks on the Shiba Inu Network
The Shiba Inu Network is periodically subject to distributed denial of service attacks to clog the list of transactions being tabulated by miners, which can slow the confirmation of authentic transactions. Another avenue of attack would be if many miners were taken offline then it could take some time before the difficulty of the mining process algorithmically adjusts, which would stall block creation time and therefore transaction confirmation time. Thus far these scenarios have not plagued the network for long or in a systemic manner.
Competitors to Shiba Inu
To the extent a competitor to Shiba Inu gains popularity and greater market share, the use and price of Shiba Inu could be negatively impacted, which may adversely affect its price.
Significant Energy Consumption to run the Shiba Inu Network
Because of the significant computing power required to mine Shiba Inu, the network’s energy consumption may ultimately be deemed to be or indeed become unsustainable (barring improvements in efficiency which could be designed for the protocol). This could pose a risk to broader and sustained acceptance of the network as a peer-to-peer transactional platform.
Risks Associated with Shiba Inu Trading Platforms
Regulation of Shiba Inu Trading Platforms
Shiba Inu trading platforms are spot markets in which Shiba Inu can be exchanged for fiat currencies (CAD, USD, etc.). Coinberry seeks to ensure that the Shiba Inu trading platforms on which it transacts are reputable, stable, and operating in compliance with applicable laws.
Limited Operating History of Shiba Inu Trading Platforms
Shiba Inu trading platforms have a limited operating history. The potential for instability of Shiba Inu trading platforms and the closure or temporary shutdown of exchanges due to fraud, business failure, hackers, distributed denial of service attacks or malware or government-mandated regulation may reduce confidence in Shiba Inu, which may adversely affect its price.
Hacking of Shiba Inu Trading Platforms May Have a Negative Impact on Perception of the Security of the Shiba Inu Network
While Shiba Inu’s blockchain has never been compromised by hackers, exchanges frequently have. Shiba Inu trading platforms that adhere to best practices are insured, and most of these have not been hacked, or if they have the loss has been minimal. Shiba Inu’s price is at risk if a platform is hacked as it can shake consumer confidence for those that do not understand the difference between a weakness in the platform versus a weakness in Shiba Inu and its blockchain.
Different Prices of Shiba Inu on the Shiba Inu Trading Platforms
Most platforms operate as isolated pools of liquidity, and so when demand spikes for a specific platform the market price for Shiba Inu on that platform can also spike, making it trade at a premium to other platforms. This tendency is common geographically, with Chinese platforms frequently trading at a premium to platforms in Europe or America.
Settlement of Transactions on the Shiba Inu Network
Upgrades by Ethereum to the Ethereum platform, a hard fork in the Ethereum platform, or a change in how transactions are confirmed on the Ethereum platform may have unintended, adverse effects on all blockchains using the ERC-20 standard, ERC-721 standard, or any other future Ethereum standard.
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.
Last Updated Jan 31, 2022