What is COTI?

COTI (“Currency of the Internet”) is a financial technology platform built on its own directed acyclic graph (DAG) based blockchain infrastructure with a Proof of Trust consensus algorithm. The stated aim of the Coti project is to become the base layer protocol upon which future decentralized solutions are built, similar to other base layer protocols like Ethereum, Solana, or Polkadot. COTI coin is the native cryptocurrency of the COTI protocol.

The Coti project began in 2017, and initially the project planned to build a decentralized payment application on top of the Ethereum network. However, the Coti project decided to expand on its original vision and develop its own blockchain protocol to be optimized for decentralized payments and designed for use by merchants, governments, payment decentralized applications, and stablecoin issuers. Its focus on enterprise use cases and white label payments infrastructure distinguishes it from other more general-purpose base layer protocols.

The Coti project launched its blockchain protocol on mainnet in June 2019 and has continued building its ecosystem. The project aims for its ecosystem to meet the challenges associated with traditional finance, including latency, fees, and global inclusion. The Coti protocol aims to scale to process over 100,000 transactions per second (TPS), currently at 10,000 TPS (as of October 2021).

The COTI token may be used as a common means of payment, including all fees and staking inside the COTI ecosystem. COTI has a fixed supply of 2,000,000,000 units.

Note that Wealthsimple transfers only supports the ERC-20 COTI token on the Ethereum network, and not the native COTI mainnet coin.

Risk Statement

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 COTI can be supported by Wealthsimple’s platform, including whether COTI is a security and/or a derivative and is being offered in compliance with securities and derivatives laws.

We evaluated COTI based on publicly available information, including (but not limited to):

• The creation, governance, usage and design of COTI, 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 COTI;
• The supply, demand, maturity, utility and liquidity of COTI;
• Material technical risks associated with COTI, including any code defects, security breaches and other threats concerning COTI 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 COTI, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of COTI; and
• Statements made by regulators or securities regulatory authorities in Canada and other jurisdictions regarding whether COTI, 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 COTI may result in changes to this Crypto Asset Statement and/or Wealthsimple’s ability to support COTI.

Like all other crypto assets, there are some general risks to investing in COTI. 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.

Additional Risks / Information

COTI has elevated regulatory risk. The United States Securities and Exchange Commission (SEC) has alleged that COTI is a security under U.S. federal securities laws in one or more enforcement proceedings pending before U.S. courts against crypto trading platforms. None of the COTI team or The COTI Foundation are parties to this proceeding, and the U.S. courts have not determined that COTI is a security. In the event that a U.S. court determines that COTI is a security or there are other material developments affecting the treatment of COTI under securities laws, Wealthsimple may cease to support COTI and/or the market for COTI may be adversely affected.

Wealthsimple only supports the ERC-20 version of COTI and does not support the version of COTI available on the COTI blockchain. Wealthsimple cannot bridge or convert the ERC-20 version of COTI to the token on the COTI network. If you wish to bridge or convert your ERC-20 version of COTI, you must first withdraw it and then bridge or convert it using tools provided by the platform or protocol, which may subject you to additional risks.

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