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 Basic Attention Token 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 Basic Attention Token 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 Basic Attention Token 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
Both the Brave browser and the Basic Attention Token (BAT) were created by Brendan Eich, co-creator of JavaScript and co-founder of Mozilla Firefox, and launched in January 2016 and May 2017, respectively. Brave is a free web browser that automatically blocks unwanted ads, trackers, invasive cookies, and malware.
Through the use of smart contracts, users of the Brave browser can sign up for a rewards program and opt in to view certain tailored ads, thus earning BAT from Brave and its trusted partners (i.e., advertisers) as a form of revenue sharing. This is facilitated through an extension which utilizes blockchain technology to anonymously and securely track users’ time spent viewing and engaging with ads.
BAT is the native token of the Brave web browser which is built on top of Ethereum (ETH) and is used to power the Brave ecosystem. Users can exchange BAT for cash, hold it in a digital wallet, tip content producers, or trade it on exchanges.*
* Currently, Newton does not provide its users with the exchanging or trading functions of BAT.
Risks of Basic Attention Token
Like an investment in other crypto assets, an investment in Basic Attention Token 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 Basic Attention Token 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 Basic Attention Token.
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 Basic Attention Token. We encourage all Newton users to perform their own due diligence to assess the risks associated with Basic Attention Token and to determine whether this level of risk is acceptable to them. Neither Basic Attention Token nor Newton guarantees the value of Basic Attention Token, and holders of Basic Attention Token will not have any recourse to Basic Attention Token or Newton if the value of Basic Attention Token declines for any reason whatsoever.
Newton’s Evaluation Process
Newton has reviewed and assessed Basic Attention Token prior to making it available on the Newton Platform and has concluded that Basic Attention Token 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 Basic Attention Token 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 Basic Attention Token, including an opinion that Basic Attention Token is not itself a security and/or derivative.
Based on publicly available information Newton has reviewed Basic Attention Token, including, but not limited to, a review of the following:
- The creation, governance, usage, and design of Basic Attention Token, including the source code, security, and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that created Basic Attention Token.
- The supply, demand, maturity, utility, and liquidity of Basic Attention Token.
- Material technical risks associated with Basic Attention Token, including any code defects, security breaches and other threats concerning Basic Attention Token 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 Basic Attention Token, including (i) any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of Basic Attention Token, 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 Basic Attention Token about whether Basic Attention Token, or generally about whether the type of crypto asset, is a security and/or derivative.
A link to the Basic Attention Token White Paper is available at the following link.