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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 Loopring 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 Loopring 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 Loopring 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

Loopring is a layer 2 scaling solution for Ethereum that leverages the concept of “Zero-Knowledge Rollups”, often shortened to “ZK-rollups”. ZK-rollups are one of two main types of rollups that developers are actively exploring as ways to increase the throughput count (often measured in transactions per second, or TPS) of Ethereum and other layer 1 blockchains. Loopring is designed to take the most user-friendly aspects of centralized exchanges, and decentralized exchanges, and combine them to craft a better user experience in DeFi.  The Loopring exchange manages order books as a centralized exchange would, allowing legacy database structures to be used, while ensuring that the actual trades are non-custodial and all trades are settled on-chain.  Loopring was founded by software developer Daniel Wang, who worked previously at Google and Boston Dynamics.

Loopring’s token, LRC, is used as a governance token for the Loopring protocol, as well as for ring-mining, a method of earning more LRC that provides liquidity to Loopring’s exchange.

* Currently, Newton does not provide its users with the ability to participate in the governance functions of LRC.

Risks of Loopring 

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

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

Newton’s Evaluation Process

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

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

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

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