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 Solana 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 Solana 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 Solana 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
Solana is a layer one blockchain billed as an “Ethereum killer”, that is designed to facilitate DApp creation and improve upon scalability issues in the space. Solana places an emphasis on usability and aims to scale using the proof-of-history (PoH) consensus mechanism, which differentiates Solana from various other protocols. Traditionally, timestamping is crucial in verifying transactions on the blockchain, and so the time a block takes to be mined needs to be computed. Proof of history solves the time problem, by creating a historical record and verifying that an event took place at a certain moment in time. Solana was founded by Anatoly Yakovenko and Greg Fitzgerald. Yakovenko worked as a software engineer at Qualcomm and Dropbox prior to founding Solana, and Solana has inspired institutional and retail interest both.
Solana (SOL) is the Solana platform’s native token and is used to power the protocol’s network as well as pay transaction fees, and it can also be staked.
* Currently, Newton does not provide its users with the ability to participate in the staking functions of SOL.
Risks of Solana
Like an investment in other crypto assets, an investment in Solana 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 Solana 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 Solana.
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 Solana. We encourage all Newton users to perform their own due diligence to assess the risks associated with Solana and to determine whether this level of risk is acceptable to them. Neither Solana nor Newton guarantees the value of Solana, and holders of Solana will not have any recourse to Solana or Newton if the value of Solana declines for any reason whatsoever.
Newton’s Evaluation Process
Newton has reviewed and assessed Solana prior to making it available on the Newton Platform and has concluded that Solana 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 Solana 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 Solana, including an opinion that Solana is not itself a security and/or derivative.
Based on publicly available information Newton has reviewed Solana, including, but not limited to, a review of the following:
- The creation, governance, usage, and design of Solana, including the source code, security, and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that created Solana.
- The supply, demand, maturity, utility, and liquidity of Solana.
- Material technical risks associated with Solana, including any code defects, security breaches and other threats concerning Solana 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 Solana, including (i) any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of Solana, 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 Solana about whether Solana, or generally about whether the type of crypto asset, is a security and/or derivative.
A link to the Solana White Paper is available at the following link.