About this Statement
Coinsquare Capital Markets Inc. (“Coinsquare”) is offering crypto contracts to purchase and sell SUI in reliance on a prospectus exemption granted by the Canadian Securities Administrators (CSA) in the exemptive relief decision dated October 12, 2022. 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 CSA jurisdictions do not apply in respect of a misrepresentation in this statement to the extent that a crypto contract is distributed under the above-noted prospectus relief.
No securities regulatory authority in Canada or any other jurisdiction has expressed an opinion about any of the crypto assets (or crypto contracts) that are available through Coinsquare’s platform, including an opinion that the crypto assets are not themselves securities and/or derivatives.
Coinsquare has compiled the information contained in this Crypto Asset Statement to the best of its ability based on publicly available information. Coinsquare is providing this Crypto Asset Statement on an “as is” basis and makes no representation or warranty as to accuracy or completeness of the contents.
About SUI
Sui is a layer-1 proof-of-stake blockchain network that aims to compete with major layer-1 networks by providing improvements in speed, security, storage, and privacy. Sui utilizes features such as horizontal scaling, composability, sparse replay and on-chain storage, as well as the Move language, to set itself apart from the already-established layer-1 networks.
Risks
As with all assets, investing in SUI is not without some general risks. Many of these risks are identified and explained in our Risk Statement. In addition to the general risks, we outline some risks that are specific to SUI below. While we make an effort to identify every source of risk, we encourage you to do your own research and ensure you are comfortable investing in SUI.
SUI’s delegated PoS staking and network security implications
Sui employs a specific sub-type of proof-of-stake consensus called delegated proof-of-stake (DPoS) whereby only a fixed set of validators secure the network by processing transactions. The validators are selected by SUI holders who choose to stake their SUI tokens. The amount of SUI staked with any validator influences that validators voting power for processing transactions.1 As of January 2024, there are only 106 active validators in the SUI network.2 This means that any SUI holders who stake their assets must delegate their staked assets to at least one of the approved validators.
The small number of validators facilitates efficiency in transaction processing, but it presents a reduced resistance against 51% attacks where bad actors could gain control of the majority of validators in the network and process false transactions. Additionally, the low number of validators means that the SUI network is more centralized than similar networks with much larger numbers of validators.3
Frozen CETUS Funds
On May 22, 2025 the CETUS DEX, built on SUI, was hacked for approximately $220 million worth of assets. The SUI token and network were not compromised, but did suffer a decline in value on the news. Additionally, the SUI validators voted to freeze accounts on chain associated with the attacker and the stolen funds. This highlights the lower level of decentralization of SUI versus a protocol like Bitcoin and may raise questions around assessing transaction finality on chain.
Coinsquare’s Due Diligence for Digital Assets
To be made available for trading on Coinsquare’s platform, a digital asset must pass the following due diligence reviews:
Coinsquare undertakes these three levels of due diligence in order to determine whether the digital asset is compliant with our legal and regulatory obligations, is secure, and has historical data supporting a beneficial business case. Coinsquare’s New Product Committee must provide final approval for a new digital asset to be made available on the platform.
References:
Other Useful Links:
SUI Website: https://sui.io
