Relationship Disclosure Document

This document sets out important information concerning our relationship with each customer (hereinafter referred to as either the “Customer” or “you”). It contains information about Shakepay Inc. (“Shakepay” or “we”), the services that we offer and your account with us. Other important information you need to know about your relationship with us is contained in the Customer Account Agreement, Privacy Policy, and other disclosures provided to you.

Information about Shakepay

Shakepay, whose head office is located in Montreal, Quebec, 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 Re Shakepay Inc., dated January 8, 2025, which permits Shakepay to operate a crypto asset trading platform (the “Shakepay Platform”).

Shakepay Financial Inc. (SFI), an affiliated entity, is a registered Money Services Business (MSB) with FinTRAC and Revenu Québec. SFI provides services related to Shakepay’s prepaid Visa card and bill payments. While SFI operates in alignment with Shakepay, it is separately regulated under the MSB framework in Canada and does not fall under CIRO oversight. Customers utilizing these services are required to accept terms specific to SFl.

Crypto assets purchased and held in an account with Shakepay are not protected by the Canadian Investor Protection Fund, the Canadian Deposit Insurance Corporation or any other investor protection insurance scheme.

Products and Services

The Shakepay Platform allows Canadian residents to buy and sell bitcoin and ether (“Crypto Assets”), send and receive Canadian dollars and Crypto Assets, and access other Shakepay services, such as prepaid cards.

Different accounts are available on the Shakepay Platform. Based on a Customer's account opening appropriateness assessment, some Customers have full access to all services available on the Shakepay Platform, other Customers are unable to purchase or receive Crypto Assets, but they can earn Crypto Asset rewards using the prepaid card, and some Customers are limited to holding fiat assets only.

The Shakepay Platform provides a Crypto Asset Statement (the “Statements”) which can be found here for Bitcoin, and here for Ether. The Statements will be updated if there is a material change with respect to one of the Crypto Assets or in the event that Shakepay decides to make other Crypto Assets available on the Shakepay Platform.

Shakepay does not have any authority to act on a discretionary basis on behalf of a Customer. That means Shakepay may not buy, sell or transfer Crypto Assets or Canadian dollars if requested by you.

Shakepay does not offer Crypto Assets that are considered securities or derivatives under securities legislation in Canada. However, regulators have indicated that securities and/or derivatives legislation may apply to platforms that facilitate the buying and selling of Crypto Assets, including Crypto Assets that are considered commodities, because your contractual right to the Crypto Asset through the Shakepay Platform may itself constitute a security and/or a derivative.

Custodial Arrangements

The vast majority of Crypto Assets held at Shakepay are stored offline in cold storage wallets. We have partnered with a cold storage provider regulated under the New York State Department of Financial Services who holds SOC 1 Type II and SOC 2 Type II certifications. At a minimum, 80% of all Customer-owned Crypto Assets on Shakepay is held in cold storage with Coinbase Custody Trust Company, LLC (“Coinbase Custody”), a US qualified custodian. Customer-owned Crypto Assets stored by Coinbase Custody are held in “For Benefit Of (FBO) accounts, owned by you, which means you have the legal and rightful claim to these assets. The remaining Crypto Assets purchased by Customers are held by Shakepay using multi-signature hot wallets secured by Fireblocks Inc. (“Fireblocks”) and BitGo Inc. (“BitGo”) (together, Fireblocks and BitGo are the “Hot Wallet Providers”). Customer fiat assets are limited to Canadian dollar balances held in accounts with a Canadian financial institution that is a qualified custodian for cash under applicable securities laws (the “Cash Custodian”), separate and apart from Shakepay’s assets. The accounts are designated as “in-trust” meaning all balances belong to Shakepay Customers.

Coinbase Custody and the Cash Custodian (together, the “Custodians”) are required to segregate customer assets from their own assets and are subject to regulatory oversight, minimum capital and insurance requirements. Customer assets are subject to risk of loss: (i) if a Custodian becomes bankrupt or insolvent; (ii) if there is a breakdown in a Custodian’s information technology systems; or (iii) due to the fraud, willful or reckless misconduct, negligence or error of a Custodian or its personnel. Shakepay has reviewed each Custodian’s reputation, financial stability, relevant internal controls and ability to deliver custodial services and has concluded that such Custodian’s system of controls and supervision is sufficient to manage risks of loss to Customer assets in accordance with prudent business practice.

Although Customers assets are generally held by a Custodian, Shakepay has access to Customer assets held online in hot wallets provided by the Hot Wallet Providers to the extent necessary to facilitate trading on the Shakepay Platform. We also have access to Customer assets when accepting or making delivery of crypto or cash in accordance with Customer instructions on a temporary basis. Finally, Shakepay has access to Customer Crypto Assets held in trust on your behalf at Coinbase Custody because the custody account is in the name of Shakepay, in trust for our Customers. Customer assets are exposed to risk of loss: (i) if there is a breakdown in Shakepay’s information technology systems; or (ii) due to the fraud, willful or reckless misconduct, negligence or error of Shakepay or its personnel. In addition, Shakepay is required under applicable securities laws to insure against the additional risk of loss which arises due to its access to Customer assets.

The Shakepay Platform enables you to buy and sell Crypto Assets but it is not intended to be a storage facility for your Crypto Assets. Shakepay encourages Customers to keep their Crypto Assets in their own private wallets for maximum security.

Risks

Trading Crypto Assets can be risky and it may not be appropriate for everyone to buy strictly for speculative reasons or with borrowed funds. Trading Crypto Assets can lead to large and immediate financial losses including the possibility that those losses may not be recovered. Crypto Asset prices have historically been much more volatile than traditional security prices. Please see the Shakepay Risk Statement for a description of the risks to consider when deciding to invest in Crypto Assets.

By purchasing Crypto Assets, you acknowledge that:

• the purchase of Crypto Assets is risky;

• you are purchasing Crypto Assets entirely at your own risk;

• no securities regulatory authority or regulator has evaluated or endorsed the merits of the Crypto Assets; and

• you could lose all of the money or Crypto Assets used to purchase the Crypto Assets.

Borrowed Money & Leveraging

Using borrowed money to finance the purchase of Crypto Assets involves greater risk than purchasing using cash resources only. If you borrow money to purchase Crypto Assets, your responsibility to repay the loan and pay interest as required by its terms remains the same even if the value of the Crypto Assets purchased declines.

You should only invest using borrowed money if:

• the additional risk is something you are comfortable with;

• you are comfortable taking on debt to buy investments that will fluctuate in value; and

• you have a stable income.

Your Costs and Compensation We Receive

Shakepay does not charge a commission when a Customer purchases or sells Crypto Assets. To make money, we set the price at which you can buy or sell Crypto Assets on Shakepay. At any point in time, there will be a difference between the price Customers can buy Crypto Assets from Shakepay and the price at which they can sell to Shakepay. Shakepay will often benefit from this difference as revenue to cover our costs as a business, and to maintain the Shakepay Platform. For further information, please click here.

Account Opening Appropriateness Assessment

Shakepay performs an account opening appropriateness assessment prior to opening an account and on an ongoing basis. We are required to determine that holding Crypto Assets on the Shakepay Platform is appropriate for you and to put your interests first. We gather “Know Your Client” (“KYC”) information (including a combination of your level of income, your net worth, your investment knowledge, your past investment experience, and your personal tolerance to risk) and require you to acknowledge that you are not looking for “investment advice” from Shakepay. If we determine that holding Crypto Assets is not appropriate for you, or becomes not appropriate for you, then you will be limited to having a fiat-only account and will be unable to purchase, receive or earn Crypto Assets.

Should there be any changes to your KYC information, you should promptly advise Shakepay of such a change.

No Advice or Financial Recommendations

You acknowledge that Shakepay will not provide any advice or financial recommendations to you and will not be responsible for making any trade-by-trade suitability determinations when accepting orders to buy or sell Crypto Assets. You alone are responsible for your own decisions and we will not consider your financial situation, investment knowledge, investment objectives, savings objectives or risk tolerance when accepting orders from you. Shakepay does not provide financial, legal, tax or investment advice or recommendations.

Conflict of Interest

SHAKEPAY OFFERS CRYPTO ASSETS FOR SALE DIRECTLY TO YOU. SHAKEPAY MAINTAINS ITS OWN INVENTORY OF CRYPTO ASSETS, SUCH THAT WHEN A CUSTOMER BUYS CRYPTO ASSETS ON SHAKEPAY, WE SELL THEM THE CRYPTO ASSETS. SIMILARLY, WHEN A CUSTOMER SELLS THEIR CRYPTO ASSETS, WE BUY THEM. AS SUCH, SHAKEPAY IS THE COUNTERPARTY TO EACH TRANSACTION WHEREBY ITS CUSTOMERS PURCHASE OR SELL CRYPTO ASSETS AND SHAKEPAY DERIVES ITS REVENUE FROM THESE TRANSACTIONS, AS FURTHER DETAILED hereHERE. In order to address this material conflict of interest, in determining the prices at which it sells Crypto Assets to its Customers, Shakepay regularly evaluates prices obtained from its liquidity providers against global benchmarks to provide fair and reasonable pricing to its Customers. Except for the material conflict of interest that arises due to the fact that Shakepay earns revenue when you buy or sell Crypto Assets from Shakepay’s inventory, Shakepay does not believe that there are any potential conflicts of interest with the use of the Shakepay Platform. . IN ORDER TO ADDRESS THE POTENTIAL IMPACTS OR RISKS OF THIS MATERIAL CONFLICT OF INTEREST, IN DETERMINING THE PRICES AT WHICH IT SELLS CRYPTO ASSETS TO ITS CUSTOMERS, SHAKEPAY REGULARLY EVALUATES PRICES OBTAINED FROM ITS LIQUIDITY PROVIDERS AGAINST GLOBAL BENCHMARKS TO PROVIDE FAIR AND REASONABLE PRICING TO ITS CUSTOMERS.

In addition, certain services, such as the prepaid Visa card and bill payments, are offered through SFI, an affiliated entity that operates as a MSB. While SFI’s services are separate from Shakepay’s Crypto Asset trading activities, the affiliation between the two entities may create a perceived or actual conflict of interest. Shakepay mitigates these risks by ensuring transparency and clear separation of operations between Shakepay Inc. and SFI. Customers must review and accept separate terms for services provided by SFI.

EXCEPT FOR THE MATERIAL CONFLICT OF INTEREST THAT ARISES DUE TO THE FACT THAT SHAKEPAY EARNS REVENUE WHEN YOU BUY OR SELL CRYPTO ASSETS FROM SHAKEPAY’S INVENTORY, SHAKEPAY DOES NOT BELIEVE THAT THERE ARE ANY POTENTIAL CONFLICTS OF INTEREST WITH THE USE OF THE SHAKEPAY PLATFORM.

Any new or reasonably foreseeable material conflicts of interest pertaining to Shakepay or its approved person, which are not avoided, will be addressed in the best interest of the Customer and will be disclosed, where required, to the Customer in a timely manner, upon identification of the material conflicts of interest.

Best Execution

Shakepay aims to achieve best execution for all Customers’ Crypto Asset orders, which is the most advantageous execution terms reasonably available under the circumstances, and subject to Shakepay’s obligations under applicable securities laws, including conflict of interest requirements. Shakepay takes into account the price of the Crypto Assets, the speed of execution of the Customer order and the level of certainty of execution of the Customer order. You can find more details in Shakepay’s Best Execution Policy.

Referrals

No compensation will be paid to Shakepay by any other party in connection with your account with Shakepay.

Shakepay may offer you the opportunity to earn rewards for activities such as referring other people to the Shakepay Platform. Shakepay’s reward offers and applicable terms are made available to you separately here or in the Shakepay Platform. Shakepay may modify, suspend or cancel the rewards at any time.

Reporting

Shakepay promptly sends the Customer a written email confirmation of all purchases, sales and transfers of Crypto Assets and fiat related transactions to their account. Information about your assets, including ongoing trade confirmations, monthly alerts when exceeding your risk tolerance, monthly, yearly or on-demand transaction summary and/or account statements are available either via email or on the Shakepay Platform. By entering into the Customer Account Agreement, you are consenting to electronic delivery of all reports and documents to which you are entitled to have delivered pursuant to applicable laws and under your relationship with Shakepay.

Trusted Contact Person

Customers will be given the opportunity to provide the name and contact information of a trusted contact person along with the Customer’s consent to contact the trusted contact person to confirm or make enquiries about any of the following:

• Shakepay’s concerns about possible financial exploitation of the Customer;

• Shakepay’s concerns about the Customer’s mental capacity as it relates to the ability of the Customer to make decisions involving financial matters;

• the name and contact information of a legal representative of the Customer, if any; or

• the Customer’s contact information.

Placing and Continuing a Temporary Hold

Shakepay is required to order a temporary hold on a Customer’s assets when both of the following conditions have been met:

• Shakepay reasonably believes that the customer is a vulnerable customer, which means a customer who might have an illness, impairment, disability or aging-process limitation that places the Customer at risk of financial exploitation; and

• financial exploitation of the Customer has occurred, is occurring, has been attempted or will be attempted.

In such an event, Shakepay will provide notice of the temporary hold and the reasons for the temporary hold to the Customer as soon as possible after placing the temporary hold. Within 30 days of placing the temporary hold and, until the hold is revoked, within every subsequent 30-day period, Shakepay will either revoke the temporary hold or provide the Customer with notice of Shakepay’s decision to continue the hold and the reasons for that decision.

Complaint Resolution Service

Shakepay has a Customer dispute resolution process in place should a Customer have a dispute. The Customer dispute resolution process is further explained here.

Last update: January 8, 2025