What is Litecoin (LTC)?
The Litecoin blockchain is what is known as a “fork” of Bitcoin which is when a group of coders copies the source code of a blockchain, in this case Bitcoin, and uses it to launch an entirely separate blockchain, often with a few tweaks. In Litecoin’s case, it is designed to fulfil a similar purpose—to process payments on a decentralized, peer-to-peer network—but is quicker and better suited to small transactions.
Litecoin is the creation of Charlie Lee, a former Google employee who contributed to the Chrome OS. After Google, he headed the engineering department of Coinbase, one of the world’s largest cryptocurrency exchanges. Charlie was Coinbase’s fifth employee; the exchange went public in May 2021, and holds a market cap of $60 billion.
As of May 2021, Litecoin has a market cap of over $26 billion. Currently the 12th largest cryptocurrency by market cap, and the third-largest Bitcoin spinoff (discounting Dogecoin, a highly-volatile meme coin that is itself a spinoff of Litecoin).
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 LTC can be supported by Wealthsimple’s platform, including whether LTC is a security and/or a derivative and is being offered in compliance with securities and derivatives laws.
We evaluated Litecoin based on publicly available information, including (but not limited to):
- The creation, governance, usage and design of Litecoin, 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 Litecoin;
- The supply, demand, maturity, utility and liquidity of Litecoin;
- Material technical risks associated with Litecoin, including any code defects, security breaches and other threats concerning Litecoin 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 Litecoin, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of Litecoin; and
- Statements made by regulators or securities regulatory authorities in Canada and other jurisdictions regarding whether Litecoin, 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 LTC may result in changes to this Crypto Asset Statement and/or Wealthsimple’s ability to support LTC.
Like all other crypto assets, there are some general risks to investing in LTC. 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.
We emphasize that this Crypto Asset Statement is not exhaustive of all risks associated with trading Litecoin. 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