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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 Celo 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 Celo 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 Celo 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

Celo is a blockchain ecosystem that aims to empower the world of smartphone users, allowing users to use phone numbers as public keys and empower those without banking access to transact with cryptocurrency.  The Celo Foundation is a non-profit organization founded by a team of people from MIT, Stanford, Google, Square, Circle, Visa, GoDaddy, World Bank, Federal Reserve Bank, Harvard University, University of Pennsylvania Law School, Cambridge University, U.S. Department of Justice, Bank of America, Capital One, Twitter, Give Directly, and the Gates Foundation.

Celo’s token, CELO, is used as a governance and utility token to pay for transaction fees, as well as to power validators, using a Proof-of-Stake (PoS) consensus to power the network.*

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

Risks of Celo

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

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

Newton’s Evaluation Process

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

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

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

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