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 Chromia 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 Chromia 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 Chromia 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
Chromia is a Layer-1 blockchain with an EVM (Ethereum virtual machine) compatible Layer-2 solution, that uses a novel data concept to blockchain called Rell, or relational blockchain. Functionally Rell is quite similar to SQL, and this allows developers to make use of more robust data structures than were typically available on the blockchain, which along with Chromia’s NFT minting standard makes Chromia an ideal launching ground for blockchain video games. Chromia was founded by Or Perelman, Henrik Hjelte and Alex Mizrahi, all three of whom were early contributors to the Proof-of-Stake (PoS) consensus mechanism in the crypto ecosystem.
Chromia’s token, CHR, is used as a utility token within the ecosystem, where DApps created with Chromia have to be paid for in CHR. CHR can also be used for DApps creators to charge fees in their own applications, and as a source of liquidity.
* Currently, Newton does not provide its users with the ability to participate in the staking functions of CHR.
Risks of Chromia
Like an investment in other crypto assets, an investment in Chromia 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 Chromia 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 Chromia.
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 Chromia. We encourage all Newton users to perform their own due diligence to assess the risks associated with Chromia and to determine whether this level of risk is acceptable to them. Neither Chromia nor Newton guarantees the value of Chromia, and holders of Chromia will not have any recourse to Chromia or Newton if the value of Chromia declines for any reason whatsoever.
Newton’s Evaluation Process
Newton has reviewed and assessed Chromia prior to making it available on the Newton Platform and has concluded that Chromia 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 Chromia 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 Chromia, including an opinion that Chromia is not itself a security and/or derivative.
Based on publicly available information Newton has reviewed Chromia, including, but not limited to, a review of the following:
- The creation, governance, usage, and design of Chromia, including the source code, security, and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that created Chromia.
- The supply, demand, maturity, utility, and liquidity of Chromia.
- Material technical risks associated with Chromia, including any code defects, security breaches and other threats concerning Chromia 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 Chromia, including (i) any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of Chromia, 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 Chromia about whether Chromia, or generally about whether the type of crypto asset, is a security and/or derivative.
A link to the Chromia White Paper is available at the following link.