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The information contained in this Crypto Asset Statement was last updated on March 15, 2024.

No securities regulatory authority in Canada has expressed an opinion about Bitcoin Cash 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 Bitcoin Cash 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 Bitcoin Cash 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

Bitcoin Cash (BCH) is a decentralized network that was created in August 2017 and is a “hard fork” of the original Bitcoin protocol and, as such, is a unique chain that is not backwards-compatible with the Bitcoin (BTC) chain.  While BTC and BCH share many of the same characteristics, they are two separate and distinct cryptocurrencies.  One notable distinction is that BCH was designed to be spent through transactions, whereas BTC was designed for holding as a store of value.  BCH has a larger block size (the main reason for the fork) allowing BCH transactions to be completed more quickly and more cheaply.  BCH also has a higher level of scalability compared to BTC.  Like BTC, however, BCH uses the Proof-of-Work (PoW) consensus mechanism for validating transactions and mining new tokens, and both BTC and BCH are capped to 21 million tokens.

Risks of Bitcoin Cash

Like an investment in other crypto assets, an investment in Bitcoin Cash 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 Bitcoin Cash 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 Bitcoin Cash.

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

Newton’s Evaluation Process

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

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

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

A link to the Bitcoin Cash White Paper is available at the following link.