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 Curve DAO 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 Curve DAO 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 Curve DAO 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 Curve platform and token were launched in August 2020 and created by Michael Egorov per the white paper published in November 2019. Curve is a decentralized exchange and an automated market maker (AMM) protocol. It is one of the world’s largest decentralized finance (DeFi) platforms functioning as a liquidity pool specifically designed for its users to efficiently swap between different ERC-20 tokens. The protocol’s liquidity pools, which are mostly made up of similar assets to minimize loss, effectively allows users to deposit crypto assets into trading pools that other users can trade against. Users who provide deposits to the Curve pool (and thus liquidity) receive a share of transaction fees charged to those who use the pools to trade crypto assets. The protocol also supplies pool tokens to the Compound protocol and Yearn.Finance to earn interest, thereby providing additional income to liquidity providers. The Curve protocol offers an orderbook-less exchange using an algorithmic regulation of liquidity pools allowing for a faster and more efficient matching of trade orders.
The native token of Curve protocol is the Curve token (CRV) which is an ERC-20 token and serves as the protocol’s governance token, which can be locked for various periods of time and is used to vote on proposals that govern the Curve platform and to earn rewards.
* Currently, Newton does not provide its users with the ability to participate in the governance functions of CRV.
Risks of Curve DAO
Like an investment in other crypto assets, an investment in Curve DAO 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 Curve DAO 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 Curve DAO.
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 Curve DAO. We encourage all Newton users to perform their own due diligence to assess the risks associated with Curve DAO and to determine whether this level of risk is acceptable to them. Neither Curve DAO nor Newton guarantees the value of Curve DAO, and holders of Curve DAO will not have any recourse to Curve DAO or Newton if the value of Curve DAO declines for any reason whatsoever.
Newton’s Evaluation Process
Newton has reviewed and assessed Curve DAO prior to making it available on the Newton Platform and has concluded that Curve DAO 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 Curve DAO 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 Curve DAO, including an opinion that Curve DAO is not itself a security and/or derivative.
Based on publicly available information Newton has reviewed Curve DAO, including, but not limited to, a review of the following:
- The creation, governance, usage, and design of Curve DAO, including the source code, security, and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that created Curve DAO.
- The supply, demand, maturity, utility, and liquidity of Curve DAO.
- Material technical risks associated with Curve DAO, including any code defects, security breaches and other threats concerning Curve DAO 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 Curve DAO, including (i) any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of Curve DAO, 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 Curve DAO about whether Curve DAO, or generally about whether the type of crypto asset, is a security and/or derivative.
A link to the Curve DAO White Paper is available at the following link.