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The information contained in this Crypto Asset Statement was last updated on October 20, 2025.

No securities regulatory authority in Canada has expressed an opinion about Cosmos 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 Cosmos 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 12, 2025. 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 Cosmos 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

The primary purpose of Cosmos is to enable blockchain interoperability, allowing independent blockchains to connect and communicate with each other in a secure and scalable manner. Building on this foundation, Cosmos provides a modular open-source framework through the Cosmos SDK so that developers can build custom, sovereign blockchains that connect to a broader “internet of blockchains” using its Inter Blockchain Communication protocol. The native token of the Cosmos network, ATOM, is used for staking, governance, and securing the ecosystem.

Key Features of Cosmos

• Interoperability Protocol: Cosmos utilizes the Inter-Blockchain Communication (IBC) protocol, a standard for communication and data transfer between independent blockchain networks. IBC enables secure and trustless transactions between different blockchains, allowing for seamless transfer of assets and data.
  
  
• Cosmos SDK: The project provides the Cosmos SDK, a robust software development kit that enables developers to build custom blockchains quickly. The SDK offers a modular framework for creating application-specific blockchains that can interoperate with other networks in the Cosmos ecosystem.
  
  
• Tendermint Consensus Engine: Cosmos employs the Tendermint consensus engine, a Byzantine Fault-Tolerant (BFT) consensus algorithm. Tendermint provides fast block confirmations and a high level of security across the network.
  
  
• Hubs and Zones: Cosmos introduces a hierarchical architecture of hubs and zones. Hubs act as the main blockchains within the network, facilitating interoperability among different zones, which are independent blockchains. This structure allows for scalable and secure communication between multiple chains.

• Governance and Staking: Cosmos incorporates an on-chain governance model where ATOM token holders can participate in key decision-making processes related to network development and upgrades. ATOM holders can also stake their tokens to help secure the network, contribute to block production, and earn rewards.

Risks of ATOM

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

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

Newton’s Evaluation Process

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

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

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

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

Addendum to Crypto Asset Statement (ATOM)

How does ATOM staking work?

Cosmos uses a delegated Proof of Stake (dPoS) consensus mechanism, where any token holder can stake their ATOM to support validators on the network. Validators are responsible for verifying transactions, maintaining on-chain records, and producing new blocks on the blockchain. Validators must meet specific requirements to join the active validator set, while regular token holders can delegate their ATOM to these validators to participate in staking without running their own node.

Staking rewards are distributed to both validators and delegators at the end of each block, based on total stake and validator performance. Validators may take a commission fee from the rewards earned by delegators. Please see “Staking Fees” below. Staked tokens remain locked for the duration of the block, and can be withdrawn or redelegated once the block ends.

Supported Validators

The infrastructure providers of the validator nodes that Newton arranges to stake ATOM with and the total fees for staking ATOM are set below under the heading Staking Asset Supplementary Disclosure: Cosmos (ATOM).

Approved validators will receive a fee (a Validator Commission) based on a percentage of staking rewards earned from the delegated ATOM. The Validator Commission is determined by the respective validator(s) and will be deducted by the ATOM protocol upon the distribution of staking rewards. The estimated annual percent yield (APY) presented in-app is inclusive of this fee.

Blocks

Activity on Cosmos is partitioned in time, into blocks, with each block being of approximately 7 seconds. 

Epochs

Validators such as those operated by Coinbase, define epochs; operational periods of about 12-15 hours to batch and process staking rewards, and are typically finalized within 24 hours.

Staking Rewards

At the protocol level, staking rewards on staked ATOM are computed once per block. Rewards accrued in a given block are issued to all participants (validators) in the following block. At the validator level, rewards are processed and distributed in epochs. When rewards are received, Newton will calculate and distribute your share of ATOM staking rewards to your respective account on a weekly basis, following an initial warm-up period. For each rewards distribution period, your share of ATOM staking rewards is proportional to the amount of ATOM that you had staked when the reward period began. When you unstake your ATOM, you may be ineligible to receive any staking rewards for the period in which you initiated the unstake action.

Staking Fees

Newton charges you a fee equal to a percentage of staking rewards to be received by or attributed to your staked ATOM through Newton’s Platform. The amount of the fee for staking ATOM is set out below under the heading Staking Asset Supplementary Disclosure: Cosmos (ATOM) next to “Reward Fee”. This fee includes the Validator Commission described above along with Newton’s staking fee, and is deducted prior to any staking rewards being distributed to your account.

Custody of Staked ATOM

ATOM staked through Newton’s Platform are staked from dedicated wallets with Newton’s custodian (Coinbase Custody Trust Company) with approved validators. Newton’s custodian will continue to hold the private keys or other cryptographic key material required to control staked ATOM for so long as these assets are staked. Your staked ATOM will not leave Newton’s omnibus accounts with the cold wallet custodian and your ATOM will continue to be attributed to your account. 

Staking Asset Supplementary Disclosure: Cosmos (ATOM)

Prior to staking any ATOM, please review Newton’s Platform Risk Statement and the Crypto Asset Statement for ATOM.

ATOM can be staked on the Newton Platform. The following is a summary of the key fees, bonding periods, and other relevant factors to staking ATOM on Newton’s Platform. This disclosure is in addition to and should be read with the risk information provided in Newton’s Platform Risk Statement and the other elements of this Crypto Asset Statement for ATOM.

Newton arranges to stake ATOM with validator nodes operated by the following infrastructure providers:

* Rewards are expressed as a percentage of units of the crypto asset staked and not the Canadian dollar value of crypto assets staked.