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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 Chainlink 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 Chainlink 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 Chainlink 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 Chainlink network was launched in June 2017 by, and is the product of, a blockchain technology start-up called SmartContract which was founded in 2014 by tech entrepreneur Sergey Nazarov. Chainlink is a decentralized software platform that connects blockchains with external data, allowing smart contracts on Ethereum to securely connect to external data sources, APIs, and payment systems.  In September 2017, the Chainlink white paper was co-authored and published by Steve Ellis, Ari Juels, and Sergey Nazarov, outlining their vision for a decentralized oracle network. 

LINK is the Chainlink network’s native cryptocurrency and is an Ethereum token that powers the Chainlink network.  As a LINK holder increases the amount of LINK staked, the more data contracts that user receives, allowing them to earn additional rewards.

* Currently, Newton does not provide its users with the ability to participate in the staking of LINK to earn rewards.

Risks of Chainlink

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

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

Newton’s Evaluation Process

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

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

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

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