Risk Statement

Last updated: May 25, 2023

BLOCKCHAIN TRANSACTIONS ARE FINAL, IRREVERSIBLE AND IRRECUPERABLE. YOU MUST BE CAREFUL TO TRANSFER CRYPTO ASSETS FROM THE SHAKEPAY PLATFORM TO YOUR OWN WALLET OR TO PARTIES THAT YOU TRUST, AND NOT TO UNTRUSTWORTHY BUSINESSES OR TO PEOPLE YOU DO NOT PERSONALLY KNOW. ONCE TRANSFERRED OUT OF THE SHAKEPAY PLATFORM, SHAKEPAY HAS NO MEANS WHATSOEVER TO ACCESS OR RECOVER IN ANY WAY YOUR CRYPTO ASSETS.

YOU ARE RESPONSIBLE FOR ENSURING THAT ANY CRYPTO ASSET OR MONEY TRANSFERS THAT YOU CONDUCT ARE WITH A TRUSTWORTHY PERSON OR BUSINESS. ANY CRYPTO ASSET OR MONEY TRANSFER OUTSIDE THE SHAKEPAY PLATFORM OR TO ANOTHER SHAKEPAY CLIENT INSIDE THE SHAKEPAY PLATFORM IS FINAL, IRREVERSIBLE AND IRRECUPERABLE.

This Risk Statement (this “Risk Statement”) is presented to you at the time of opening your account with Shakepay Inc. (“we”, “us”, “our” or “Shakepay”) and will subsequently be available to you in your account, through the Shakepay website or mobile app. You must acknowledge having received, read and understood this Risk Statement in order to open and operate an account with Shakepay, and to continue operating an account in the event that the Risk Statement is updated. Please read this Risk Statement in its entirety.

This Risk Statement does not disclose all of the risks or relevant considerations of entering into a Crypto Contract (as defined below) contract with Shakepay to buy, sell and hold bitcoin and ether (the “Shakepay Platform”). In light of the risks involved in buying, selling and holding bitcoin and ether and any new crypto asset Shakepay may make available on the Shakepay Platform (“Crypto Assets”) you should undertake such transactions only if you understand the contractual relationship with Shakepay, and the extent of your exposure to the risks associated with trading in Crypto Assets. Please refer to the Relationship Disclosure Information for a more detailed description of this relationship as well as the Shakepay Terms of Use and the respective Crypto Asset Statement (Bitcoin and Ether), which provides, in plain language, key information on the Crypto Assets for each Crypto Asset available on the Shakepay Platform.

Trading in Crypto Assets may not be suitable for everyone. You should carefully consider whether trading is appropriate for you in light of your knowledge, experience, financial objectives, financial resources and other relevant circumstances. Shakepay believes that its clients should be aware of the risks involved in the purchase, sale and custody of Crypto Assets. Trading of Crypto Assets may not be appropriate for you, particularly if you use funds drawn from student loans, mortgages or emergency funds. The volatility and unpredictability of the price of Crypto Assets may result in significant losses over a short period of time.

Shakepay offers Crypto Assets in reliance on a prospectus exemption contained in the exemptive relief decision Re Shakepay Inc. dated May 25, 2023. We are required to provide you with this Risk Statement under the terms of this exemptive relief. Please be aware that the statutory rights of action for damages and the right of rescission provided for in sections 217 and 221 of the Securities Act (Québec) and in the securities legislation of any of the other jurisdictions in Canada would not apply to a misrepresentation in this Risk Statement. No securities regulatory authority in Canada has assessed or endorsed the Crypto Contracts or any of the Crypto Assets made available through the Shakepay Platform, including an opinion on whether any such Crypto Asset is a security and/or derivative. A Crypto Contract means a client’s contractual rights relating to a Crypto Asset and related rights under the client’s agreement with the Shakepay Platform (Crypto Contract).

The following is a brief non-exhaustive summary of some of the more significant factors and particular risks you should take into account when deciding whether to trade Crypto Assets. It is always prudent to research specific Crypto Assets before making a purchase or investment so that you can understand the risks in the context of your personal circumstances. Shakepay does not provide advice about what risks are prudent for you to take.

Loss of Investment

Crypto Assets are digital representations of value that function as a medium of exchange, a unit of account, or a store of value, but do not have “legal tender” status in Canada. Crypto Assets are not operated by the Canadian government or Bank of Canada. The value of Crypto Assets is derived from the market forces of supply and demand, and they have been, historically, significantly more volatile than currency issued by the Bank of Canada. The value of Crypto Assets is derived from the continued willingness of market participants to buy them, which may result in the potential for permanent and total loss of value of a particular Crypto Asset should the market for a Crypto Asset disappear entirely.

Shakepay Support for the Crypto Assets

Crypto Assets differ in their functions, structures, governance, and rights. Shakepay attempts to provide support for popular Crypto Assets (i.e. bitcoin and ether) but does not guarantee that it will continue to support any particular Crypto Asset. Shakepay has established and applies policies and procedures to thoroughly review Crypto Assets prior to making them available on the Shakepay Platform. Such review includes, but is not limited to, publicly-available information concerning: (i) the creation, governance, usage and design of the Crypto Assets, including the source code, security and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that created the Crypto Assets; (ii) the supply, demand, maturity, utility and liquidity of the Crypto Assets; (iii) material technical risks associated with the Crypto Assets, including any code defects, security breaches and other threats concerning the Crypto Assets and their supporting blockchains (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them; and (iv) legal and regulatory risks associated with the Crypto Assets, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of the Crypto Assets, as well as whether the product could be considered a security and/or a derivative by a regulator in Canada and what the likelihood of that possibility is, confirmed by external legal advice if deemed necessary. Shakepay only makes Crypto Assets which have significant supply, demand, maturity and liquidity available for trading on the Shakepay Platform, as Crypto Assets with these qualities tend to satisfy the other factors we consider when evaluating new products.

Shakepay will monitor ongoing developments related to the Crypto Assets available through the Shakepay Platform that may cause a Crypto Asset’s legal status, or the review described above, to change. In the event that we no longer wish to support or make available a particular Crypto Asset in light of the abovementioned review, we will provide notice in advance to allow you to either sell or withdraw the Crypto Asset in question, if possible.

In the event Shakepay is forced to disable or remove a Crypto Asset from the Shakepay Platform, Shakepay will determine, in consultation with our principal securities regulator, a reasonable deadline to cease trading to allow clients holding the Crypto Asset to determine the best course of action for them. Shakepay staff will attempt to locate registered securities dealers that will accept delivery of client positions in the asset and advise clients holding the asset when such dealers have been identified. Clients will also be advised that Crypto Assets can be transferred to external blockchain addresses. At 5:00 p.m. on the deadline date, Shakepay will cease all trading in the Crypto Asset and cancel all open buy and sell orders (the “Cease Trading Deadline”). After the Cease Trading Deadline, Shakepay will continue to hold remaining Crypto Assets in custody until the clients arrange delivery to another dealer or withdrawal to external blockchain addresses. Shakepay will send periodic reminders to all clients that, after the Cease Trading Deadline, the remaining Crypto Assets will be held in trust for the clients but may no longer be sold through the Shakepay Platform. Shakepay will determine, in consultation with our principal securities regulator, a further deadline for the liquidation of any remaining quantities of the delisted Crypto Asset. An email will be sent to all clients advising that Shakepay will liquidate all remaining quantities of delisted Crypto Assets within the Shakepay Platform for the equivalent Canadian dollars at that time.

Risks In Trading Crypto Assets

Trading in Crypto Assets comes with risks such as: volatile market price swings or flash crashes and cybersecurity risks. In addition, Crypto Assets markets and exchanges are not regulated with the same controls or client protections available in equity, option, futures, or foreign exchange investing. There is no assurance that a person who accepts a Crypto Asset as payment today will continue to do so in the future. Investors should conduct extensive research into each individual Crypto Asset before investing. The features, functions, characteristics, operation, use and other properties of the specific Crypto Asset may be complex, technical, or difficult to understand or evaluate. Crypto Assets may be vulnerable to attacks on the security, integrity or operation, including attacks using computing power sufficient to overwhelm the normal operation of the Crypto Asset’s blockchain or other underlying technology. Some Crypto Assets transactions will be deemed to be made when recorded on a public ledger, which is not necessarily the date or time that a transaction may have been initiated.

Crypto Asset trading requires knowledge of Crypto Asset markets. You should have appropriate knowledge and experience before engaging in substantial Crypto Assets trading. Any individual Crypto Asset may change or otherwise cease to operate as expected due to changes made to its underlying technology or changes resulting from an attack. These changes may include, without limitation, a fork or a rollback. Such changes may dilute the value of an existing Crypto Asset position and/or distribute the value of an existing Crypto Asset position to another Crypto Asset. Any Crypto Asset may be cancelled, lost or double spent, or otherwise lose all or most of their value, due to forks, rollbacks, attacks, or failures to operate as intended.

Transactions in Crypto Assets are final, irreversible and irrecuperable, and, accordingly, losses due to fraudulent or accidental transactions may not be recoverable. The nature of Crypto Assets may lead to an increased risk of fraud or loss.

Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a particular Crypto Asset suddenly drops, or if a Crypto Asset is halted, suspended or withdrawn from trading on the Shakepay Platform due to recent news events, unusual trading activity, changes in the underlying Crypto Asset system, government orders, or changes in the regulation of such Crypto Asset.

The greater the volatility of a particular Crypto Asset, the greater the likelihood that problems may be encountered in executing a transaction. In addition to normal market risks, you may experience losses due to one or more of the following: system failures, hardware failures, software failures, network connectivity disruptions, and data corruption.

Short History Risk

As a relatively new open source technology, it is expected that there will continue to be technical developments in blockchain technology, which could impact the value of a Crypto Asset. Due to this short history, it is not certain whether the economic value, governance or functional elements of Crypto Assets will persist over time. The Crypto Asset community has successfully navigated a considerable number of technical and political challenges since the onset of Crypto Assets, which Shakepay believes is a strong indicator that it will continue to engineer its way around future challenges. That said, the continuation of a vibrant Crypto Asset community is not guaranteed, and insufficient software development, contribution rates, community disputes regarding the development of the network and scaling options, or any other unforeseen challenges that the community is not able to navigate could have an adverse impact on the price of a Crypto Asset.

Volatility in the Price of Crypto Assets and Loss of Liquidity

Crypto Assets markets are sensitive to new developments, and since volumes are still maturing, any significant changes in market sentiment can induce large swings in volume and subsequent price changes. Crypto Asset prices on trading platforms have been volatile and subject to influence by many factors, including the levels of liquidity, public speculation on future appreciation in value, swings in investor confidence and the future growth of alternative Crypto Assets that may gain market share. In certain circumstances, it may become difficult or impossible to assess the value of your Crypto Assets.

Potential Decrease in Global Demand for Crypto Assets

Crypto Assets represent a new form of digital value that is still being appraised by society. Their underlying value is driven by their utility as a store of value, means of exchange, or unit of account. Just as oil is priced by the supply and demand of global markets, as a function of its utility to, for instance, power machines and create plastics, so too is a Crypto Asset priced by the supply and demand of global markets for its own utility within remittances, B2B payments, timestamping, etc. Speculators and investors using Crypto Assets as a store of value then layer on top of means of exchange users, creating further demand. If consumers stop using Crypto Assets as a means of exchange, or their adoption slows, then the price may suffer. Investors should be aware that there is no assurance that Crypto Assets will maintain their long-term value in terms of purchasing power in the future or that the acceptance of Crypto Assets for payments by mainstream retail merchants and commercial businesses will continue to grow.

While the value of bitcoins may be derived primarily from its security, trading volume, and position as first mover, the value of ether relies far more on its use case as a platform for other applications. The ethereum blockchain is intended to allow people to operate decentralized applications using blockchain technology that do not rely on the actions of a centralized intermediary. Ether, which is the primary currency of the ethereum blockchain, can then be used to compensate for the effort of others to power these decentralized applications and ensure that any transactions that occur on these applications are recorded in the blockchain. Accordingly, the long-term value of ether may be tied to the success or failure of the blockchain technology and the decentralized applications built upon the ethereum blockchain.

Forking of Crypto Assets

Both the bitcoin and ethereum blockchain networks are powered, primarily, by open source software. When a modification is released by developers, and a substantial majority of “miners” consent to the modification, a change is implemented and the blockchain network continues uninterrupted. However, if a change were to be introduced with less than a substantial majority consenting to the proposed modification, and the modification is not compatible with the software in operation prior to its modification, the consequence would be what is known as a fork (i.e. a split) of the blockchain. One blockchain would be maintained by the pre-modification software and the other by the post-modification software. The effect is that both blockchains would operate in parallel, but independently. There are examples of such forks having occurred. In some cases, rollbacks may occur where a blockchain is brought back to a previous state. Some forks result in rollbacks. In the future, further forks could occur again, and affect the viability or value of a Crypto Asset. Shakepay may choose not to support any future fork of the underlying blockchain of the Crypto Assets available on our Shakepay Platform, in which case you will not receive the new Crypto Assets that may be created as a result of that fork.

Issues with the Cryptography Underlying the Blockchains

In the past, flaws in the source code for Crypto Assets have been exposed and exploited, including flaws that disabled some functionality for users of the impacted blockchains, exposed their personal information and/or resulted in the theft of their Crypto Assets.

Although the bitcoin and ethereum blockchains have demonstrated resilience and integrity over time, the cryptography underlying either one could, in the future, prove to be flawed or ineffective. For example, developments in mathematics and/or technology, including advances in digital computing, algebraic geometry and quantum computing, could result in the cryptography of the blockchain network being vulnerable to attack. This could negatively affect the value of Crypto Assets.

General Blockchain Risks

Blockchain addresses provided by the Shakepay Platform may change and you should always confirm the address by using the Shakepay Platform immediately before undertaking any blockchain transaction.

There are some digital assets that have address formats that overlap (e.g. bitcoin and certain bitcoin forks). If you send a different digital asset to a Shakepay address not intended for that digital asset, then it will result in a permanent loss because the other digital asset is not supported. Always take care when conducting transactions, and if you are in doubt, you should contact Shakepay customer support to receive technical support about blockchains and address formats.

Shakepay’s blockchain nodes may become temporarily unsynchronized and introduce delays. Although we endeavour to minimize downtime, blockchain node software changes often and may not be stable. This is outside of the control of Shakepay.

When conducting a blockchain transaction, you may experience a delay caused by the blockchain that you are interacting with and/or delays caused by the technical systems that make up the Shakepay Platform. Any blockchain transaction that you initiate will result in an immediate change in your Shakepay account balance but the transaction will take some time to become finalized on the applicable blockchain (i.e. incorporated into a block in a blockchain), and cannot be cancelled in the interim. It is possible that for technical or business reasons (e.g. network congestion on a blockchain), despite Shakepay’s usual practice of rebroadcasting, a blockchain transaction may not become finalized (i.e incorporated into a block on the respective blockchain), and eventually your Shakepay account will reflect the failure of the transaction. In unusual circumstances it could take 24-48 hours for a failed transaction to be displayed properly within the Shakepay Platform.

Susceptibility to Legislative and Regulatory Changes and Future Financial Institution Support

Federal, provincial, territorial or foreign governments may restrict the use and exchange of Crypto Assets, and regulation in Canada (and internationally) is still developing. Legislative and regulatory changes or actions may adversely affect the use, transfer, exchange, and value of Crypto Assets.

The regulation of Crypto Assets continues to evolve in Canada (and in foreign jurisdictions), which may restrict the use of Crypto Assets or otherwise impact the demand for Crypto Assets. There may be limitations on the ability of a securities regulator in Canada to enforce Canadian laws on foreign entities, and foreign rules that apply to Crypto Asset activities which occur in other jurisdictions may not necessarily be enforced in that jurisdiction. Furthermore, banks and other financial institutions may refuse to process funds for Crypto Asset transactions, process wire transfers to or from Crypto Asset trading platforms, Crypto Asset-related companies or service providers, or maintain accounts for persons or entities transacting in the Crypto Assets.

Concentration Risk

Shakepay currently offers only bitcoin and ethereum on the Shakepay Platform. By concentrating your investment in bitcoin or ethereum, or both, the financial, economic, business, and other developments affecting the market for these Crypto Assets will have a greater effect on your investment portfolio than if you had not concentrated your investment in these assets, which may increase the volatility of your investments.

Concentration and 51% Attack Risks

Certain addresses on the bitcoin and ethereum blockchain networks hold a significant amount of the currently outstanding bitcoin and ether, respectively. If one of these addresses were to exit their bitcoin or ether positions, it could cause volatility that may adversely affect the price.

Further, if anyone gains control over 51% of the computing power (hash rate) used by the blockchain network, they could use their majority share to double spend their Crypto Assets. If such a “51% attack” were to be successful, this could significantly erode trust in public blockchain networks like bitcoin and ethereum to store value and serve as a means of exchange, which may significantly decrease the value of Crypto Assets in general.

Electronic Trading and Dependence on the Internet

There are risks associated with using an internet-based trade execution software application including, but not limited to, the failure of hardware and software. Shakepay maintains an independent and secure ledger of all transactions to minimize loss, and maintains contingency plans to minimize the possibility of system failure. However, Shakepay does not control signal power, reception, routing via the internet, configuration of your equipment or the reliability of your connection to the internet. The result of any failure of the foregoing may be that you are unable to place an order, your order is not executed according to your instructions, or your order is not executed at all. Other caveats also apply, as described in the Shakepay Terms of Use. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a particular Crypto Asset suddenly drops, or if trading is halted due to recent news events, unusual trading activity, or changes in the underlying Crypto Asset system. The greater the volatility of a particular Crypto Asset, the greater the likelihood that problems may be encountered in executing a transaction. In addition to normal market risks, you may experience losses due to one or more of the following: system failures, hardware failures, software failures, network connectivity disruptions, and data corruption.

Cyber Security Risk

The nature of Crypto Assets may lead to an increased risk of fraud or cyber attack. A breach in cyber security refers to both intentional and unintentional events that may cause Shakepay to lose proprietary information or other personal information subject to privacy laws, suffer data corruption, or lose operational capacity. This in turn could cause Shakepay to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss. Cyber security breaches may involve unauthorized access to Shakepay’s digital information systems (e.g. through “hacking” or malicious software coding), but may also result from outside attacks such as denial-of-service attacks (i.e. efforts to make network services unavailable to intended users). In addition, cyber security breaches of Shakepay’ third-party service providers (e.g. the custodians and hot wallet providers) can also give rise to many of the same risks associated with direct cyber security breaches. As with operational risk in general, Shakepay has established risk management systems designed to reduce the risks associated with cyber security.

Open Loop System

Clients are permitted to transfer into their account Crypto Assets purchased outside the Shakepay Platform and obtain delivery from Shakepay of any Crypto Assets in which they have an interest. Consequently, you may also be exposed to certain risks, including receiving Crypto Assets that may have been stolen or otherwise have been “tainted” and which could subject you to a third party claim in relation to those Crypto Assets.

BLOCKCHAIN TRANSACTIONS ARE FINAL, IRREVERSIBLE AND IRRECUPERABLE. YOU MUST BE CAREFUL TO TRANSFER CRYPTO ASSETS FROM THE SHAKEPAY PLATFORM TO YOUR OWN WALLET OR TO PARTIES THAT YOU TRUST, AND NOT TO UNTRUSTWORTHY BUSINESSES OR TO PEOPLE YOU DO NOT PERSONALLY KNOW. ONCE TRANSFERRED OUT OF THE SHAKEPAY PLATFORM, SHAKEPAY HAS NO MEANS WHATSOEVER TO ACCESS OR RECOVER IN ANY WAY YOUR CRYPTO ASSETS.

YOU ARE RESPONSIBLE FOR ENSURING THAT ANY CRYPTO ASSET OR MONEY TRANSFERS THAT YOU CONDUCT ARE WITH A TRUSTWORTHY PERSON OR BUSINESS. ANY CRYPTO ASSET OR MONEY TRANSFER OUTSIDE THE SHAKEPAY PLATFORM OR TO ANOTHER SHAKEPAY CLIENT INSIDE THE SHAKEPAY PLATFORM IS FINAL, IRREVERSIBLE AND IRRECUPERABLE.

You are responsible for ensuring that any Crypto Asset or money transfers that you conduct are with the correct person or business. Shakepay encourages you to confirm the recipient’s Shakepay username (if applicable), phone number, email address and blockchain address before conducting a transfer.

Custody of Crypto Assets and Cash

Shakepay holds Crypto Assets for the benefit of clients separate and apart from our own assets. Shakepay also holds Crypto Assets for the benefit of clients separate and apart from the assets of any custody service provider and hot wallet service provider.

Shakepay uses Coinbase Custody Trust Company, LLC (“Coinbase Custody”) as a custodian to hold a minimum of 80% of the Crypto Assets that are purchased by its clients in cold storage. The remaining Crypto Assets purchased by clients 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”). Shakepay has access to the Crypto Assets held by Coinbase Custody and in hot wallets provided by the Hot Wallet Providers for the purposes of settling transactions for clients.

Coinbase Custody is licensed as a limited purpose trust company with the New York Department of Financial Services (NYDFS). Coinbase Global Inc., the parent company of Coinbase Custody, maintains US$320 million of insurance (per-incident and overall) which covers losses of assets held by Coinbase Custody, on behalf of its clients due to third-party hacks, copying or theft of private keys, insider theft or dishonest acts by Coinbase Custody employees or executives and loss of keys.

The Crypto Assets that Coinbase Custody holds in trust for the clients of Shakepay are held in designated omnibus accounts in trust in the name of Shakepay, for the benefit of the Shakepay’s clients, and are held separate and apart from the assets of the Shakepay, Shakepay’s affiliates, Coinbase Custody, and the assets of other clients of Coinbase Custody.

While Shakepay believes that these arrangements adequately protect our clients, these arrangements do expose clients to certain risks, including, but not limited to: (i) risks relating to Crypto Assets being held in cold and hot wallets and not being able to obtain possession of their Crypto Assets, including as a result of loss or theft of the Crypto Assets in the case of fraud, wilful or reckless misconduct, negligence or error of Shakepay or its personnel or third parties or in the case that Shakepay fails to maintain adequate security and control of any and all keys, IDs, passwords, hints, personal identification numbers, API keys, 2-factor authentication devices or backups, or any other codes that Shakepay uses to access the accounts held by Coinbase Custody and to access the hot wallets provided by the Hot Wallet Providers; (ii) any potential deficiencies in the Coinbase Custody’ or Hot Wallet Providers’ insurance or risk management, or insurance or similar instruments maintained by Shakepay, which may not be adequate to protect against all losses or thefts of the Crypto Assets; and (iii) Coinbase Custody’s bankruptcy or insolvency.

Shakepay has reviewed Coinbase Custody’s reputation, financial stability, relevant internal controls, and ability to deliver custodial services and has concluded that Coinbase Custody’s system of controls and supervision is sufficient to manage risks of loss to client assets in accordance with prudent business practice.

Holding crypto assets online in hot wallets is riskier than holding assets with Coinbase Custody because the assets are online and therefore susceptible to hacks and theft. However, holding assets in the hot wallets is necessary because crypto assets need to be online to be traded and to be deposited or withdrawn from the Platform. Because Shakepay controls the online hot wallets, you are at risk that Shakepay or our personnel may lose or steal your assets. Shakepay would be liable to return to you any Crypto Assets or other balances in your account for any loss caused by our fraud, negligence or wilful default, and we have adopted robust internal controls to detect and prevent this type of behaviour by our personnel.

The Hot Wallet Providers have each obtained a SOC report under the SOC 2 – Type 2 standard from a leading global audit firm. Shakepay has reviewed a copy of the SOC 2 – Type 2 audit report prepared by the auditors of the Hot Wallet Providers, and has not identified any material concerns. Fireblocks has insurance coverage in the amount of US$30 million in aggregate which, in the event of theft of crypto assets from hot wallets secured by Fireblocks, will be distributed among applicable Fireblocks customers, which could include Shakepay, pursuant to an insurance settlement agreement. Shakepay has licensed software from Digital Assets Services Limited (trading as Coincover) (Coincover) to provide additional security for keys to Crypto Assets held by Shakepay using Fireblocks and BitGo, including key pair creation, key pair storage, device access recovery and account access recovery. Coincover is based in the United Kingdom and is regulated by the U.K. Financial Conduct Authority. Backup key material for Shakepay’s hot wallets is secured by Coincover and 100% guaranteed against loss or theft by a leading global insurance provider.

All cash received by Shakepay from clients is held by one or several Canadian financial institutions in a segregated account in Shakepay’s name, in trust for its clients. While Shakepay believes that these arrangements adequately protect our clients, these arrangements do expose clients to risk of loss in the case of willful or reckless misconduct, negligence or error of Shakepay or its personnel. In addition to any insurance obtained by Shakepay to protect against such losses, Shakepay mitigates against this risk by ensuring that client cash is held separately from its own funds and that all client cash holdings are reconciled on a daily basis.

You can access your Crypto Assets by logging into your account using your email and password. You are responsible for protecting your email and password, and if you lose that information you may not be able to access your account. You are also responsible for securing your device, email account, phone number, and other methods of communication that you use with the Shakepay Platform. We endeavour to honour all withdrawal requests in a timely manner. However, in periods of market volatility or other unusual market activity you may experience delays in withdrawing your assets. In addition, we are not responsible for any delays caused by circumstances beyond our control including internet service failures or delays.

Lack of Investor Protection Insurance

Shakepay is not a member of the Canadian Investor Protection Fund (“CIPF”) and Crypto Assets purchased and held in an account with Shakepay are not protected by the CIPF, the Canadian Deposit Insurance Corporation or any other investor protection insurance scheme.

Leverage Risk Disclosure

Shakepay does not offer loans and discourages the use of leverage by clients. Using borrowed money to finance the purchase of Crypto Assets involves greater risk than not doing so. If you borrow money to purchase Crypto Assets, your responsibility to repay the loan (and pay interest) as required by its terms likely will remain the same even if the value of the Crypto Assets purchased declines.

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