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The information contained in this Crypto Asset Statement was last updated on November 18, 2024.

No securities regulatory authority in Canada has expressed an opinion about Polygon 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 Polygon 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 Polygon 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

Polygon, with the ticker POL, formerly known as MATIC, was founded in 2017 by Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun. The Polygon protocol serves as a scaling solution for Ethereum, designed to combine Ethereum and sovereign blockchains into a unified multi-chain system. Polygon ensures Ethereum compatibility and enhances scalability by utilizing Layer 2 sidechains—independent blockchains that operate alongside the Ethereum main chain. This architecture enables faster and more cost-efficient transactions, making it an attractive option for developers and users alike.

Some Interesting Facts and Key Features about POL:

• Scalable Infrastructure for Decentralized Applications: Polygon provides a robust and scalable framework for building decentralized applications (dApps). Its suite of Layer-2 solutions, such as its Proof-of-Stake (PoS) chain and zk-rollups, enhances Ethereum’s capabilities by enabling faster and more cost-efficient transactions. This makes Polygon ideal for diverse blockchain use cases, including DeFi, NFTs, and gaming.
• Low-Cost Transactions: Polygon significantly reduces gas fees compared to Ethereum’s Layer-1 network, enabling affordable transactions that drive adoption among developers and users alike. This efficiency supports high-frequency transactions, which are critical for decentralized finance (DeFi), NFT marketplaces, and gaming applications.
• Extensive Ecosystem of Integrations: Polygon supports a wide range of decentralized platforms and applications, from DeFi protocols to NFT projects and Web3 innovations. Its compatibility with the Ethereum Virtual Machine (EVM) allows developers to seamlessly migrate or integrate existing Ethereum-based applications, fostering innovation and expanding its ecosystem.

Risks of Polygon

Like an investment in other crypto assets, an investment in Polygon 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 Polygon 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 Polygon.

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 Polygon.  We encourage all Newton users to perform their own due diligence to assess the risks associated with Polygon and to determine whether this level of risk is acceptable to them.  Neither Polygon nor Newton guarantees the value of Polygon, and holders of Polygon will not have any recourse to Polygon or Newton if the value of Polygon declines for any reason whatsoever.

Newton’s Evaluation Process

Newton has reviewed and assessed Polygon prior to making it available on the Newton Platform and has concluded that Polygon 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 Polygon 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 Polygon, including an opinion that Polygon is not itself a security and/or derivative.

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

• The creation, governance, usage, and design of Polygon, including the source code, security, and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that created Polygon.
• The supply, demand, maturity, utility, and liquidity of Polygon.
• Material technical risks associated with Polygon, including any code defects, security breaches and other threats concerning Polygon 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 Polygon, including (i) any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of Polygon, 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 Polygon about whether Polygon, or generally about whether the type of crypto asset, is a security and/or derivative.

A link to the Polygon White Paper is available at the following link.