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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 Serum 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 Serum 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 Serum 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

Serum is a decentralized exchange (DEX) operating on the Solana network and is the only exchange with an on-chain order book and trading engine, making the trading experience truly decentralized.  Serum was founded in conjunction by FTX, the Solana Foundation, and Alameda Research, and currently boasts a large team of experts working to further develop the project in the Serum Foundation.

Serum’s token, SRM, is used as a governance token for the Serum’s governance platform as well as a utility token where users can save up to 50% on fees charged by the exchange.

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

Risks of Serum 

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

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

Newton’s Evaluation Process

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

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

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

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