What is Pax Gold?
The Pax Gold (PAXG) token is a gold-backed cryptocurrency launched by Paxos Trust Company (Paxos) in September 2019. Paxos states that each token in circulation is backed by one fine troy ounce (t oz) of a 400 oz London Good Delivery gold bar, stored in Brink’s vaults. According to Paxos, holders of PAXG tokens own physical gold held in custody by Paxos, and under certain circumstances, PAXG holders may redeem their PAXG for the physical gold with Paxos. Since PAXG represents physical gold, its value is tied directly to its real-time market value.
The stated goal of Pax Gold was to increase the tradability of gold, which as a physical commodity is not easily divisible or flexible for transport.
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 PAXG can be supported by Wealthsimple’s platform, including whether PAXG is a security and/or a derivative and is being offered in compliance with securities and derivatives laws.
We evaluated PAXG based on publicly available information, including (but not limited to):
- The creation, governance, usage and design of PAXG, 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 PAXG;
- The supply, demand, maturity, utility and liquidity of PAXG;
- Material technical risks associated with PAXG, including any code defects, security breaches and other threats concerning PAXG 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 PAXG, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of PAXG; and
- Statements made by regulators or securities regulatory authorities in Canada and other jurisdictions regarding whether PAXG, 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 PAXG may result in changes to this Crypto Asset Statement and/or Wealthsimple’s ability to support PAXG.
Like all other crypto assets, there are some general risks to investing in PAXG. 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
We emphasize that this Crypto Asset Statement is not exhaustive of all risks associated with trading. 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