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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 0x 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 0x 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 0x 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

0x was co-founded in October 2016 by Will Warren and Amir Bandeali.  It is an open-source protocol and decentralized exchange (DEX) that facilitates peer-to-peer trading of ERC-20 tokens on the Ethereum blockchain.  Unlike centralized crypto exchanges, DEXs facilitate crypto trades between wallets directly, bypassing the need for users to have an account with the platform.  Due to the reduced number of  steps involved in a transaction, a user’s costs and exposure to potential risk (such as hacking attempts) decreases significantly.

ZRX is the 0x platform’s native cryptocurrency and it is an ERC-20 token that was launched in October 2018.  ZRX is used to power the 0x protocol, pay transaction fees, and serves as the platform’s governance token.  Like other crypto platforms, 0x’s network governance is distributed by assigning voting rights to each ZRX holder who can then earn rewards by staking ZRX on the Proof-of-Work mechanism.  ZRX can also be purchased and staked in order to participate in the voting process, and holders can also delegate their tokens to market-makers to earn passive rewards from trading fees.” *

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

Risks of 0x

Like an investment in other crypto assets, an investment in 0x 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 0x 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 0x.

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 0x.  We encourage all Newton users to perform their own due diligence to assess the risks associated with 0x and to determine whether this level of risk is acceptable to them.  Neither 0x nor Newton guarantees the value of 0x, and holders of 0x will not have any recourse to 0x or Newton if the value of 0x declines for any reason whatsoever.

Newton’s Evaluation Process

Newton has reviewed and assessed 0x prior to making it available on the Newton Platform and has concluded that 0x 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 0x 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 0x, including an opinion that 0x is not itself a security and/or derivative.

Based on publicly available information Newton has reviewed 0x, including, but not limited to, a review of the following:

• The creation, governance, usage, and design of 0x, including the source code, security, and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that created 0x.
• The supply, demand, maturity, utility, and liquidity of 0x.
• Material technical risks associated with 0x, including any code defects, security breaches and other threats concerning 0x 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 0x, including (i) any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of 0x, 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 0x about whether 0x, or generally about whether the type of crypto asset, is a security and/or derivative.

A link to the 0x White Paper is available at the following link.