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The information contained in this Crypto Asset Statement was last updated on August 29, 2025

No securities regulatory authority in Canada has expressed an opinion about Sky 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 Sky 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 12, 2025. 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 Sky 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

Sky Protocol, the evolution of the Maker Protocol, is a decentralized system that builds technology to facilitate borrowing and saving. It is an Ethereum‑based open‑source protocol that traces its origins to 2014 and first launched in 2017 under the stewardship of Danish entrepreneur Rune Christensen; in August 2024 the project began rebranding from Maker to Sky as part of the Endgame plan. The Sky system relies on two core tokens to function: USDS, a stablecoin whose value is pegged to the USD, and SKY, a governance token. Borrowing continues to originate through smart‑contract “Vaults” (collateralized debt positions) that generate DAI when users lock accepted cryptocurrency as collateral; users can then upgrade DAI 1:1 into USDS via the on‑chain converter, while Peg Stability Modules help manage the peg through predictable stablecoin swaps. When users are ready to recover their locked collateral, they repay their Vault debt (denominated in DAI) along with a stability fee. 

SKY is an ERC‑20 token and the protocol’s native governance currency that powers Sky’s decision‑making and risk management. SKY grants rights to holders—such as locking and voting in the “Chief” contract—that influence crucial parameters and processes of the protocol; the voting power of each user is dependent on the size of their SKY stake. SKY is not mined; it is acquired either by converting MKR at a fixed on‑chain rate of 1 MKR to 24,000 SKY or by purchasing on exchanges that list SKY. Through governance (including mechanisms like the Smart Burn Engine), SKY holders collectively manage the Sky Protocol and the financial risks that underpin USDS.

* Currently, Newton does not provide its users with the ability to participate in the staking and governance functions of SKY.

Risks of Sky

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

Newton’s Evaluation Process

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

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

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

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