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The information contained in this Crypto Asset Statement was last updated on January 21, 2025.

No securities regulatory authority in Canada has expressed an opinion about S 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 S 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, 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 S 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

Coin Description

Sonic (S) is the native token of the Sonic Layer-1 blockchain, empowering holders to participate in shaping the platform's future. Sonic is an EVM-compatible Layer 1 platform designed to empower developers with robust infrastructure and competitive incentives for DeFi innovation. With over 10,000 TPS and sub-second confirmation times, Sonic delivers the speed and scalability needed to drive the next generation of decentralized applications.

Key Features of Sonic (S):

• Staking And Incentives: S holders can stake their tokens to earn rewards, driving deeper involvement in the ecosystem while enhancing the platform’s stability.
• Validator Participation: S holders can contribute to the security and decentralization of the network by running a validator.
• Participating in Governance: S holders can influence the platform's future by proposing and voting on key decisions, ensuring a decentralized and community-driven approach to ecosystem development.

Background Information (Issuer, Team, etc.)

Sonic was launched by a team consisting mainly of key members of the Fantom Opera team. Designed to provide an extremely fast settlement layer for digital assets, Sonic is equipped to handle approximately 900 million transactions per day. Additionally, Sonic’s Fee Monetization program allows developers to earn up to 90% of the fees generated by their applications.

Risks of S

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

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

Newton’s Evaluation Process

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

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

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