The information contained in this Crypto Asset Statement was last updated on August 15, 2022.
No securities regulatory authority in Canada has expressed an opinion about Bancor 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 Bancor 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 August 15, 2022. 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 Bancor 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
Bancor is a decentralized staking protocol, allowing users to benefit from a single-sided staking pool that has no potential for impermanent loss, an issue which is present in most other liquidity pooling mechanisms. Bancor is able to offer higher than average staking rates for a variety of assets, such as WBTC, ETH, LINK, AAVE, USDC, and USDT. Bancor was the first DeFi protocol ever founded and is one of the longest running, most heavily audited projects in the crypto space. The protocol is community owned by the anonymous Bancor Dao.
Bancor’s token, BNT, is used as a governance and utility token for the Bancor protocol, where it can collect fees from swaps within liquidity pools, and can be used to free up space for one to stake in Bancor’s many staking pools.
* Currently, Newton does not provide its users with the ability to participate in the governance functions of BNT.
Risks of Bancor
Like an investment in other crypto assets, an investment in Bancor 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 Bancor 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 Bancor.
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 Bancor. We encourage all Newton users to perform their own due diligence to assess the risks associated with Bancor and to determine whether this level of risk is acceptable to them. Neither Bancor nor Newton guarantees the value of Bancor, and holders of Bancor will not have any recourse to Bancor or Newton if the value of Bancor declines for any reason whatsoever.
Newton’s Evaluation Process
Newton has reviewed and assessed Bancor prior to making it available on the Newton Platform and has concluded that Bancor 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 Bancor 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 Bancor, including an opinion that Bancor is not itself a security and/or derivative.
Based on publicly available information Newton has reviewed Bancor, including, but not limited to, a review of the following:
- The creation, governance, usage, and design of Bancor, including the source code, security, and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that created Bancor.
- The supply, demand, maturity, utility, and liquidity of Bancor.
- Material technical risks associated with Bancor, including any code defects, security breaches and other threats concerning Bancor 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 Bancor, including (i) any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of Bancor, 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 Bancor about whether Bancor, or generally about whether the type of crypto asset, is a security and/or derivative.
A link to the Bancor White Paper is available at the following link.