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Posted on Nov 17th, 2022

ATTN: A Note on FTX and Gemini

The FTX collapse continues to impact a variety of financial services firms.

Purpose took a leadership position when it launched the world’s first direct bitcoin and ether ETFs. These are highly regulated funds with institutional custody, deep internal governance and security models, and carry no leverage.

Our crypto funds’ assets are custodied with Gemini in segregated cold storage wallets in the name of Purpose’s funds. These assets are never re-hypothecated or lent out.

Recently, Gemini paused withdrawals from their Earn program due to a temporary suspension of redemptions issued by Genesis, the lending partner of the Gemini Earn program.

This has no impact on Gemini’s institutional custody service. We continue to have access to our Funds’ assets and have seen no disruption to regular fund operations.

Gemini is licensed in New York as a Trust Company, and regulated under New York Banking Law, by the New York State Department of Financial Services. They are a full reserve platform.

The fiduciary and the legal relationship between Gemini and Purpose is such that in an unlikely event of a Gemini insolvency, Purpose’s crypto funds’ custodied assets are not held on Gemini's balance sheet but held in trust solely for the benefit of Purpose's funds.

We continue to actively monitor this situation and will ensure that our customers’ assets remain protected. Our ETFs remain the best way to access the long-term returns of crypto in a safe and secure manner.

—Purpose Investments

The content of this document is for informational purposes only, and is not being provided in the context of an offering of any securities described herein, nor is it a recommendation or solicitation to buy, hold or sell any security. The information is not investment advice, nor is it tailored to the needs or circumstances of any investor. Information contained on this document is not, and under no circumstances is it to be construed as, an offering memorandum, prospectus, advertisement or public offering of securities. No securities commission or similar regulatory authority has reviewed this document and any representation to the contrary is an offence. Information contained in this document is believed to be accurate and reliable, however, we cannot guarantee that it is complete or current at all times. The information provided is subject to change without notice and neither Purpose Investments Inc. nor its affiliates will be held liable for inaccuracies in the information presented.

Commissions, trailing commissions, management fees and expenses all may be associated with investment funds. Please always read the prospectus before investing. As with any investment, there are risks to investing in investment funds. There is no assurance that any fund will achieve its investment objective, and its net asset value, yield, and investment return will fluctuate from time to time with market conditions. If the securities are purchased or sold on a stock exchange, you may pay more or receive less than the current net asset value. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.

Certain statements in this document are forward-looking. Forward-looking statements (“FLS”) are statements that are predictive in nature, depend on or refer to future events or conditions, or that include words such as “may,” “will,” “should,” “could,” “expect,” “anticipate,” intend,” “plan,” “believe,” “estimate” or other similar expressions. Statements that look forward in time or include anything other than historical information are subject to risks and uncertainties, and actual results, actions or events could differ materially from those set forth in the FLS. FLS are not guarantees of future performance and are by their nature based on numerous assumptions. Although the FLS contained in this document are based upon what Purpose Investments and the portfolio manager believe to be reasonable assumptions, Purpose Investments and the portfolio manager cannot assure that actual results will be consistent with these FLS. The reader is cautioned to consider the FLS carefully and not to place undue reliance on the FLS. Unless required by applicable law, it is not undertaken, and specifically disclaimed, that there is any intention or obligation to update or revise FLS, whether as a result of new information, future events or otherwise.