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 Yearn.Finance 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 Yearn.Finance 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 Yearn.Finance 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
Yearn.Finance (YFI) is the native cryptocurrency of the Yearn Finance platform which houses a collection of decentralized finance (DeFi) products that allow its users to earn interest on their crypto assets using smart contract platforms like Ethereum. When YFI was launched, it distributed its initial 30,000 tokens equally to liquidity providers and platform users.
Previously known as yEarn.finance, Yearn Finance was developed entirely by Andre Cronje, a South African software developer. In November and December 2020, Yearn merged with DeFi protocol, Yearn fork Pickle Finance, DeFi loss insurance protocol Cover Protocol, and institutional service provider Akropolis’s Development. Following these mergers, Yearn then acquired SushiSwap.
Risks of Yearn.Finance
Like an investment in other crypto assets, an investment in Yearn.Finance 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 Yearn.Finance 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 Yearn.Finance.
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 Yearn.Finance. We encourage all Newton users to perform their own due diligence to assess the risks associated with Yearn.Finance and to determine whether this level of risk is acceptable to them. Neither Yearn.Finance nor Newton guarantees the value of Yearn.Finance, and holders of Yearn.Finance will not have any recourse to Yearn.Finance or Newton if the value of Yearn.Finance declines for any reason whatsoever.
Newton’s Evaluation Process
Newton has reviewed and assessed Yearn.Finance prior to making it available on the Newton Platform and has concluded that Yearn.Finance 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 Yearn.Finance 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 Yearn.Finance, including an opinion that Yearn.Finance is not itself a security and/or derivative.
Based on publicly available information Newton has reviewed Yearn.Finance, including, but not limited to, a review of the following:
- The creation, governance, usage, and design of Yearn.Finance, including the source code, security, and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that created Yearn.Finance.
- The supply, demand, maturity, utility, and liquidity of Yearn.Finance.
- Material technical risks associated with Yearn.Finance, including any code defects, security breaches and other threats concerning Yearn.Finance 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 Yearn.Finance, including (i) any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of Yearn.Finance, 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 Yearn.Finance about whether Yearn.Finance, or generally about whether the type of crypto asset, is a security and/or derivative.
A link to the Yearn.Finance White Paper is available here.