What is Ethereum Classic?
Ethereum Classic (ETC) is a decentralized, open-source blockchain platform that emerged as a result of a contentious hard fork in the Ethereum (ETH) network in 2016. The fork was initiated following the infamous DAO (Decentralized Autonomous Organization) attack, in which a hacker exploited a vulnerability in the DAO's smart contract, siphoning off a significant amount of Ether. In response, the Ethereum community debated potential solutions, ultimately leading to a decision to perform a hard fork to return the stolen funds to their original owners. While the majority of the community supported this decision, a subset disagreed with the hard fork on ideological grounds, arguing that blockchain transactions should be immutable and that "code is law." As a result, they continued on the original Ethereum chain, which became known as Ethereum Classic.
Ethereum Classic maintains the original vision of Ethereum as an unchangeable blockchain, upholding the principle of immutability. While Ethereum and Ethereum Classic share a common ancestry and initially had similar technical specifications, they have since evolved in different directions. ETC has its own development community and roadmap, with key organizations like the Ethereum Classic Cooperative supporting its growth and development. Over time, the differences between ETH and ETC have become more pronounced, with each having its own set of supporters, use cases, and development priorities.
What is the ETC token?
ETC is the native token of the Ethereum Classic network. ETC can be used for peer-to-peer payments, as gas to execute smart contracts on the Ethereum Classic platform, and as a store of value or investment. Additionally, ETC is tradeable on many cryptocurrency exchanges. There is a maximum supply of 210,700,000 ETC, of which approximately 142,000,000 are currently in circulation.
Before trading any crypto assets it is important to understand the risks. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.
No securities regulatory authority or regulator in Canada has evaluated or endorsed the Crypto Contracts or any of the crypto assets made available through the platform.
Wealthsimple has performed an assessment of whether ETC can be supported by Wealthsimple’s platform, including whether ETC is a security and/or a derivative and is being offered in compliance with securities and derivatives laws.
We evaluated ETC based on publicly available information, including (but not limited to):
- The creation, governance, usage and design of ETC, including the source code, security and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that first created ETC;
- The supply, demand, maturity, utility and liquidity of ETC;
- Material technical risks associated with ETC, including any code defects, security breaches and other threats concerning ETC and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them;
- Legal and regulatory risks associated with ETC, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of ETC; and
- Statements made by regulators or securities regulatory authorities in Canada and other jurisdictions regarding whether ETC, or generally about whether the type of crypto asset, is a security and/or a derivative.
Wealthsimple monitors ongoing developments related to crypto assets available on its platform for significant changes that may affect Wealthsimple’s original assessment of those assets, including Wealthsimple’s assessment of the application of securities and derivatives laws. Any significant changes relating to ETC may result in changes to this Crypto Asset Statement and/or Wealthsimple’s ability to support ETC.
Like all other crypto assets, there are some general risks to investing in ETC. These include short history risk, volatility risk, liquidity risk, demand risk, forking risk, cryptography risk, regulatory risk, concentration risk, electronic trading risk and cyber security risk. Please review the Wealthsimple Crypto Product Risk Disclosure for additional discussion of general risks associated with the crypto assets made available through the platform.
The Ethereum Classic network presents heightened cyber security risk, as it has been subject to successful 51% attacks in the past. A 51% attack occurs when a single miner or mining pool gains control of over half of a network's computational power, enabling them to manipulate transaction verification or double-spend coins. Following a series of attacks in August 2020, the network deployed an update to mitigate the risk of such attacks in the future. No successful attacks have been reported since the update.
We emphasize that this Crypto Asset Statement is not exhaustive of all risks associated with trading ETC. Investors should perform their own assessment to determine the appropriate level of risk for their personal circumstances.
Wealthsimple is offering Crypto Contracts in reliance on a prospectus exemption contained in the exemptive relief decision Re Wealthsimple Investments Inc. dated December 18, 2023 (the Decision).
The statutory rights of action for damages and rescission in section 130.1 of the Securities Act (Ontario), and, if applicable, similar statutory rights under securities legislation of other jurisdictions of Canada, do not apply in respect of this Crypto Asset Statement to the extent a Crypto Contract is distributed under the prospectus relief in the Decision.
Last Updated: January 1, 2024