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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 Litecoin 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 Litecoin 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 Litecoin 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

Litecoin was created by Charlie Lee, a former Google and Coinbase engineer and developer, and was created as a Litecoin “fork”.  The term “fork” when referring to crypto assets is commonly used to describe the creation of a new blockchain (i.e., a “fork” or “split” in the chain) when the original blockchain’s protocol, or rules, is changed in one or more ways.  The resultant “fork” usually employs substantially similar code to the original.  In the case of Litecoin, it was forked from Bitcoin, and changes were made to allow it to process payments on a decentralized peer-to-peer network while facilitating smaller transactions more efficiently.  Relative to Bitcoin, Litecoin is able to process blocks much more quickly and transactions are also much cheaper.

Risks of Litecoin

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

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

Newton’s Evaluation Process

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

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

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

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