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The information contained in this Crypto Asset Statement was last updated on Mar 5, 2024

No securities regulatory authority in Canada has expressed an opinion about Pepe or any of the other Crypto Contracts or Crypto Assets made available through Newton Crypto Ltd. (Newton) on the Newton Platform, including an opinion that Pepe itself is not a security and/or derivative.  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.

Newton is offering Crypto Contracts in reliance on a prospectus exemption contained in the exemptive relief decision Re Newton Crypto Ltd. dated March 8, 2024.  The statutory rights of action for damages and the right of rescission in section 130.1 of the Securities Act (Ontario) and similar legislation in the other provinces and territories of Canada would not apply in respect of a misrepresentation in this Crypto Asset Statement or the Newton Platform Risk Statement.

This overview provides a summary of certain risks associated with Pepe and is not an exhaustive description or summary of these risks and, in addition, does not take into account an individual’s particular situation or risk tolerance.  Investors are encouraged to conduct their own research prior to trading any crypto asset.

Newton users should read the Newton Platform Risk Statement for additional discussion of general risks associated with crypto assets made available through the Newton platform. A copy of the Newton Platform Risk Statement acknowledged by you is available in your account in the “Statements & Reports” section.

Token Description & Project Background

Pepe, also known as Pepe Token, or just “PEPE”, is a cryptocurrency that was launched in April 2023. It is based on the Ethereum blockchain and is named after the popular internet meme Pepe the Frog. 

Pepecoin has been gaining popularity in recent months, and its price has increased significantly. This is likely due to the fact that it is a meme coin, which are often popular among members of the crypto community. Meme coins are often based on popular internet memes, and they can be a way for the crypto community to get involved in the latest trends.

Here are some of the key features of Pepe Token:

• It is based on the Ethereum blockchain.
• It is named after the popular internet meme Pepe the Frog, which gives it a built-in following.
• The project initially implemented a deflationary mechanism, burning a small portion of tokens with each transaction to create scarcity. However, this feature was later disabled due to concerns about potential centralization.
• PepeFork (PORK), another meme coin inspired by PEPE, emerged in response to some community members' dissatisfaction with the original project's lack of transparency and utility.

Risks of PEPE 

Like an investment in other crypto assets, an investment in Pepe includes the following general risks:  (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 general risks associated with crypto assets, you may refer to the Newton Platform Risk Statement.  In terms of specific risks, as Pepe is one of the longest-standing crypto assets and its community base is widely decentralized, there is no central working group or authority to disclose material information to the public regarding Pepe.

Please note that these risks and the associated summaries or overviews provided for each herein are not intended to be an exhaustive discussion pertaining to all such risks and, in addition, there may be other risks that come with exposure to Pepe. We encourage all Newton users to perform their own due diligence to assess the risks associated with Pepe and to determine whether this level of risk is acceptable to them.  Neither Pepe nor Newton guarantees the value of Pepe, and holders of Pepe will not have any recourse to Pepe or Newton if the value of Pepe declines for any reason whatsoever.

Newton’s Evaluation Process

Newton has reviewed and assessed Pepe prior to making it available on the Newton Platform and has concluded that Pepe is not a security or derivative under Canadian securities legislation; however, there is a risk that this conclusion could change in the future and that, in such event, Newton will be required to halt, suspend, and then remove Pepe from its platform as described in the Newton Platform Risk Statement.

Further, as indicated above, no Canadian securities regulatory authority has expressed an opinion about Pepe, including an opinion that Pepe is not itself a security and/or derivative.

Based on publicly available information Newton has reviewed Pepe, including, but not limited to, a review of the following:

• The creation, governance, usage, and design of Pepe, including the source code, security, and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that created Pepe.
• The supply, demand, maturity, utility, and liquidity of Pepe.
• Material technical risks associated with Pepe, including any code defects, security breaches and other threats concerning Pepe 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 Pepe, including (i) any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of Pepe, and (ii) statements made by any securities regulatory authorities in Canada, other regulators in IOSCO-member jurisdictions, or the regulator with the most significant connection to Pepe about whether Pepe, or generally about whether the type of crypto asset, is a security and/or derivative.