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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 Hedera Hashgraph 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 Hedera Hashgraph 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 Hedera Hashgraph 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

Hedera Hashgraph is an enterprise grade blockchain aimed to facilitate the creation of dApps, and places a main focus on sustainability and scalability.  Hedera Hashgraph uses a novel form of distributed ledger technology called a Hashgraph, which enables Hedera to handle up to 10,000 transactions per second.  Hedera’s main services, beyond the ability to mint NFTs and write smart contracts, are its consensus layer which can be used for identity verification and its decentralized file storage capabilities.  Hedera Hashgraph was founded by Dr. Leemon Baird who, prior to founding Hedera, had over a decade of experience in computer science and cyber security and previously worked as a researcher at The Academy Center by Cyberspace Research.

Hedera Hashgraph’s token, HBAR, is used to pay for transactions on the network, host smart contracts, power DApps, and pay for storage of information.

Risks of Hedera Hashgraph

Like an investment in other crypto assets, an investment in Hedera Hashgraph 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 Hedera Hashgraph 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 Hedera Hashgraph.

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

Newton’s Evaluation Process

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

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

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

A link to the Hedera Hashgraph White Paper is available at the following link.