Canton Strategic Holdings (CNTN) Investor update summary

Institutional adoption and collateral

• DTCC pilot completed July 15 with 30+ firms; full rollout expected in late October.

• DerivNex executed Canton's first on-chain OTC total return swap; six Q3 Super Validators joined: a16z crypto, LSEG, Marex, Paxos, Shinhan Asset Management and TreasurySpring.

• Canton Foundation surpassed 100 members; ISLA and ISDA joined to develop legal and operational standards for securities lending.

• U.K. DIGIT issuance is scheduled no later than Q1 2027, with Bank of England commitment to accept DIGIT as collateral in market operations.

• Virtu, Tradeweb and M1X Global completed a fully on-chain repo using USDM1, a Marshall Islands digital bond backed 1:1 by short-term U.S. Treasuries.

Network activity and governance

• Network activity was lower in Q3, attributed to application optimization and process adjustments following CIP-104 tokenomics changes.

• Broadridge launched DLX for banks and broker-dealers to issue and service tokenized bonds and equities on Canton, with connectivity to DTC's planned launch.

• CIP-104 implementation is progressing toward rewards tied to activity, measured through CC burned and verified on-chain traffic.

• Universal Burn CIP passed, aligning burn and rewards across Global Synchronizer and subnet activity; implementation is planned over 2027.

• Q3 average BME was 569; weighted CIP voting, linking Super Validator voting weight to locked token balances, remained under discussion.

U.S. regulatory developments

• Speakers viewed the failed CLARITY vote as leaving securities and derivatives oversight to the SEC and CFTC, while agencies continue advancing rules and guidance.

• SEC innovation exemption creates a five-year conditional path for tokenized securities venues to trade tokenized NMS stocks.

• Tokenized shares must be the same securities as market-listed stocks, with the same rights; venues are permissioned to support compliance.

• Speakers described the exemption as an onshore framework with safeguards and activity limits, intended to support compliant U.S. investor access.