Token Description & Project Background

Paxos Dollar (USDP) is an ERC-20 stablecoin that is fully backed by the U.S. dollar at a 1:1 ratio. It functions as a fully-reserved asset, meaning it can be redeemed for one U.S. dollar at any time. USDP operates similarly to other fiat-tracking assets within decentralized environments, facilitating transactions across decentralized exchanges, providing liquidity, and earning interest through digital lending platforms. 

In 2021, USDP underwent a rebranding from its previous name, Paxos Standard Token (PAX). It was developed by Paxos, a regulated financial institution based in New York, led by CEO Charles Cascarilla. The Paxos team compromises individuals with diverse backgrounds and experiences, ranging from Wall Street to Silicon Valley. 

Paxos, alongside Gemini, was among the first virtual currency companies to receive a Trust charter from the New York State Department of Financial Services (NYDFS). To ensure the alignment of USDP’s supply with the reserve supply, the USDP undergoes monthly reviews conducted by Withum, a reputable U.S. auditing firm. 

Risks of USDP

Like an investment in other crypto assets, there are some general risks to investing in USDP. These include:  (i) volatility risk and liquidity risk, (ii) short history risk, (iii) demand risk, (iv) forking risk, (v) code defects, (vi) regulatory risk, (vii) electronic trading risk, and (viii) cyber security risk. For additional information of these and other general risks associated with crypto assets and Uphold’s platform, please refer to the Risks Specific to Holding Digital Assets statement.

In addition to these general risks, an investment in USDP is subject to the following specific risks:

• Although USDP provides monthly and historical attestations, there is still a possibility of the USDP token temporarily deviating from its peg in times of significant volatility or disruptions to the custody provider’s financial stability. 

We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with USDP. Investors should conduct their own research and perform their own assessment before trading any crypto asset to determine the appropriate level of risk for their personal circumstances.

The Paxos community and aforementioned founders are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of USDP have no recourse to Paxos Founders, Paxos, or Uphold if USDP declines in value for any reason.

Changes to applicable law may adversely affect the use, transfer, exchange, or value of any of your crypto assets, and such changes may be sudden and without notice.

Uphold’s Evaluation Process

Prior to listing USDP on the Uphold Platform, Uphold performed due diligence on USDP and determined that USDP is unlikely to be a security or derivative under relevant securities legislation. Uphold’s analysis including reviewing publicly available information on the following: 

• The creation, governance, usage, and design of USDP, including ensuring the source code is open-source, audited and peer reviewed, security and monthly attestations.
• The supply, demand, maturity, utility, and liquidity of USDP.
• Any marketing materials put forward by the USDP social team including on, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
• Material technical risks associated with USDP, including any code defects, security breaches and other threats concerning USDP 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 USDP, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of USDP. 

General

Uphold has prepared this Crypto Asset Statement based on publicly available information. Although Uphold has taken steps to obtain information from apparently reliable sources, information contained in this Crypto Asset Statement may be inaccurate, incomplete or out-of-date. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.

Uphold users should read the Risks Specific To Holding Digital Assets statement for additional discussion of general risks associated with crypto assets made available through the Uphold platform.  

Canadian residents, please note that Uphold has filed an application for registration in certain Canadian jurisdictions but has not yet obtained registration. Until such time as Uphold obtains registration, Uphold has agreed to abide by the terms of an undertaking available at the following link. Please also review the Uphold Canada – Crypto Risk Statement for additional discussion of general risks associated with the crypto assets made available through Uphold Platform. Please be aware that statutory rights of action for damages or rescission in section 130.1 of the Securities Act (Ontario) and, if applicable, similar statutory rights under securities legislation in the other provinces and territories of Canada do not apply in respect of this Crypto Asset Statement or other disclosures on the Uphold website and Risks Specific To Holding Digital Assets statement. 

Last updated on June 21, 2023.