Crypto Asset Statement USDC
Last updated
Last updated
No securities regulatory authority or regulator in Canada has assessed or endorsed USDC or any of the other Crypto Contracts or Crypto Assets made available through Shakepay Inc. (“Shakepay”) on the Shakepay Platform, including an opinion that USDC itself is not a security and/or derivative. Changes to applicable law may adversely affect the use, transfer, exchange, or value of any of your Crypto Assets, and such changes may be sudden and without notice.
Shakepay is regulated as an investment dealer by the Canadian Investment Regulatory Organization (CIRO). Shakepay is also registered as an investment dealer in each province and territory of Canada, subject to specific terms and conditions contained in the exemptive relief decision , which permits Shakepay to operate a crypto asset trading platform and offer Crypto Contracts. The statutory rights of action for damages and the right of rescission in sections 217 and 221 of the Securities Act (Québec) 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 Shakepay Risk Statement.
What is USDC?
USDC (USD Coin) is a type of digital asset known as a "value-referenced crypto asset" (VRCA) and designed to maintain a stable value by pegging its worth to the U.S. Dollar on a 1:1 basis. This design makes USDC a practical option for conducting transactions or holding digital assets without the volatility typically associated with cryptocurrencies. However, while USDC is often referred to as a “stablecoin,” there is no guarantee it will consistently maintain its $1 USD value in secondary markets or that reserves will always fully cover redemptions.
USDC was created by Circle Internet Financial LLC (Circle) in 2018, initially only as an ERC-20 token on the Ethereum blockchain, but it has since expanded to operate on other networks. Shakepay only supports the ERC-20 token version of USDC on the Ethereum blockchain.
The primary goal of USDC is to offer a faster, more cost-effective, and efficient way to send and receive digital dollars compared to traditional banking systems. It was also designed to address challenges in the crypto market, such as price volatility and the complexities of converting between fiat and cryptocurrencies. USDC combines the reliability of fiat currency with the speed and transparency of blockchain technology, making it a practical tool for payments, trading, and value storage in the digital economy.
Circle is a subsidiary of Circle Internet Group, Inc. Outside of Canada, Circle is compliant with the prevailing U.S. regulatory standards that apply to leading fintech and payments firms. Through its regulated entities, Circle holds money transmitter or equivalent licenses in applicable U.S. states and jurisdictions and is regulated under the U.S. Bank Secrecy Act as a money services business with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN).
How Does USDC Work?
USDC is fiat-collateralized, meaning every USDC token is backed by reserves held in cash and short-term U.S. Treasury bonds. These reserves are audited regularly to ensure they fully match the amount of USDC in circulation. This structure ensures that USDC maintains a stable value equivalent to one U.S. Dollar.
Circle represents that these reserves consist of U.S. dollar-denominated assets held in segregated accounts for the benefit of USDC holders. They include cash held in accounts at U.S. regulated financial institutions, such as The Bank of New York Mellon, and investments in the Circle Reserve Fund, a government money market fund managed by BlackRock. The Reserve Fund, custodied at The Bank of New York Mellon, holds short-term U.S. Treasuries and cash.
On December 3, 2024, Circle entered into an with the Ontario Securities Commission (OSC) and the Canadian Securities Administrators (CSA) (the “Undertaking”). This Undertaking includes representations and commitments by Circle to comply with requirements outlined in CSA Notice 21-333, Crypto Asset Trading Platforms: Terms and Conditions for Trading Value-Referenced Crypto Assets with Clients.
As part of this Undertaking, Circle commits to maintaining reserves fully backing USDC 1:1 with U.S. dollar-denominated assets, including cash and short-term government debt, held in segregated accounts with qualified custodians. These accounts are separate from Circle’s corporate funds and are protected from creditor claims. Circle also provides monthly assurance reports from independent accountants to verify reserve adequacy and publishes detailed disclosures about USDC’s features, risks, and redemption processes (made available on ). Circle agreed that within 120 days of their financial year end they will make publicly available their consolidated annual financial statements. Furthermore, Circle has pledged to cooperate with Canadian regulators and promptly disclose any material events impacting USDC or its reserves.
While these measures are designed to enhance USDC’s stability and reliability, risks remain. These include potential market volatility or unforeseen events that could affect Circle’s ability to meet redemption demands, as further outlined below.
Risks
Canada’s securities regulators require that we disclose to you certain information and make certain statements regarding digital assets.
We are required to inform you that digital assets (referred to more broadly as “Crypto Assets” by Canada’s securities regulators), including stablecoins, are risky and come with unique characteristics. We encourage all customers to do their own research before purchasing or selling any digital asset including USDC.
No Canadian securities regulatory authority or regulator has evaluated or endorsed the Crypto Contracts or any of the Crypto Assets made available through the Shakepay platform, including USDC. No Canadian securities regulatory authority has expressed an official opinion on USDC including whether it is considered a security and/or a derivative.
Shakepay has conducted an assessment of USDC, we do not express an opinion about whether it is a security and/or a derivative. Should USDC ever be legally deemed a security and/or a derivative, or due to other regulatory changes in Canada, Shakepay may be obligated to stop offering the Crypto Asset on our platform for some or all of our customers.
Shakepay’s due diligence considered the developer ecosystem, technical risks, legal/enforcement actions, timeline, market capitalization and liquidity of USDC. Our due diligence did not find any concerns based on the factors considered and we note that USDC is widely used by customers in regulated Canadian and international venues.
However, there is no guarantee that USDC will maintain a stable value when traded on secondary markets, or that the reserve of assets will be adequate to satisfy all redemptions. In the event of the insolvency of Circle, there is a possibility that its creditors may have rights to the reserve assets that could outrank the rights of USDC holders, or otherwise interfere with your ability to access the reserve assets.
Shakepay is offering what securities regulators in Canada term “Crypto Contracts”, including USDC, under the “Prospectus Relief” exemption as contained in the exemptive relief decision dated January 8, 2025, and USDC under the Circle Undertaking dated December 3, 2024 complying with CSA Notice 21-333, Crypto Asset Trading Platforms: Terms and Conditions for Trading Value-Referenced Crypto Assets with Clients. Canadian securities regulators require us to inform you that “the statutory rights of action for damages and the right of rescission in the securities legislation of each province and territory of Canada do not apply to any misrepresentation in this Crypto Asset Statement”. Shakepay is unable to offer legal advice with respect to Canadian securities laws and does not express an opinion as to any remedies that may or may not be available to you.
For more information about USDC and disclosures published by its issuer, visit:
https://www.circle.com/en/transparency (attestations regarding reserves)
https://www.circle.com/en/notices (issuer event disclosures)
Last Updated: May 28, 2025 (v1.2025)
This Crypto Asset Statement does not include all risks associated with buying and selling USDC. Like an investment in other Crypto Assets, an investment in USDC includes the following general risks: (i) volatility risk and liquidity risk, (ii) short history risk, (iii) demand risk, (iv) forking risk, (v) code defects, (vi) regulatory risk, (vii) electronic trading risk, and (viii) cyber security risk. You are encouraged to also review the for additional discussion of the general risks associated with what Canadian securities regulators term “Crypto Assets”. You must always conduct your own assessment and should not rely on this Crypto Asset Statement or the Risk Statement, which highlight only certain risks relating to USDC.