June 11 – 17, 2018 | SEC, Canadian Regulations & More Crypto News

North iQ Weekly Newsletter is curated to provide insights on digital asset industry developments, market announcements, and performance analysis.

SEC: Bitcoin and Ether are not Securities

June 14, 2018 – William Hinman, the head of the Division of Corporation Finance at the US Securities and Exchange Commission (SEC), has announced that two of the leading cryptocurrencies, bitcoin and ether, are not classified as securities. He also provided guidelines for determining if other cryptocurrencies and ICOs are classified as securities. Notably, if there is an expectation of a return by a third party, particularly when a person or company is directly involved in the creation and sale of the asset, that crypto may be classified as a security. Hinman and the SEC do not recognize bitcoin or ether as securities, largely because they have been decentralized. For bitcoin and ether, there is no central party that benefits from the success of the cryptocurrencies, unlike many ICOs. The announcement gave a boost to the price of most major cryptocurrencies on June 14.

“Central to determining whether a security is being sold is how it is being sold and the reasonable expectations of purchasers,” said Hinman. “Over time, there may be other sufficiently decentralized networks and systems where regulating the tokens or coins that function on them as securities may not be required.”

Read the full article here.

Most Leading Blockchain Projects are Built on Ethereum

June 11, 2018 – Kevin Rooke, a popular cryptocurrency researcher and YouTube contributor, has noted that the Ethereum community now has over 250,000 developers, and 94 of the top 100 blockchain projects are utilizing the Ethereum network. Major cryptocurrencies such as bitcoin and litecoin do not use the Ethereum blockchain; however, many emerging cryptos utilize Ethereum’s ERC-20 token standard as their foundation of development. By owning the cryptocurrency ether, an investor can own a part of the major ecosystem that dominates the global crypto market. Despite new competition, Rooke notes that Ethereum’s preferred utilization amongst developers gives it a compelling case for the future.

“You simply cannot build excellent applications and products without a big developer base behind you. But today, Ethereum has roughly 250,000 developers building on its platform. The industry is still really small [and thus], 250,000 is a shocking number,” said Rooke.

Read the full article here.

Financial Industry Spends $1.7 Billion on Blockchain Annually

June 12, 2018 – Leading market intelligence provider Greenwich Associates has released a report on blockchain spending from the financial services industry. The financial services industry spends about $1.7 billion USD annually on developing blockchains, which are known to power popular cryptocurrencies such as bitcoin. The report also determines that many companies are increasing their spending on the development of distributed ledger technologies (DLT), which are commonly found on the Ethereum blockchain. Budgets spent on blockchain creation and development have increased 67% in just one year, and about one in ten banks were found spending over $10 million USD every year.

Despite blockchain and distributed ledger technologies being a top focus for some financial services firms, the study recognized that many are experiencing development difficulties. “More than half the executives we interviewed told us that implementing DLT was harder than they expected,” said Richard Johnson, the vice-president of Greenwich Associates Market Structure and Technology. Despite difficulties, Johnson says that over three-quarters of these developing projects should go live within two years.

Read the full article here.

Canadian Crypto Exchanges Must Report Transactions Over $10,000 CAD

June 11, 2018 – The Department of Finance Canada has released a Regulatory Impact Analysis Statement that proposes amendments to Canada’s current AML and ATF policies. The department is expecting to recognize Canadian crypto exchanges as money service businesses (MSBs), meaning they will have to report all trades over $10,000 CAD. The federal agency is looking to “close loopholes”, as well as recognize deficiencies in compliance which have already been set by the Financial Action Task Force (FATF).

The statement recognizes that “persons and entities that are ‘dealing in virtual currency’” would be deemed MSBs. Historically, MSBs were required to implement a full compliance program and register with FINTRAC, and many Canadian crypto exchanges will now be required to follow suit.

Read the full article here.

Billionaire Investor Tim Draper Explains How Bitcoin Will Hit $250,000

June 12, 2018 – Famed billionaire and investor Tim Draper has outlined a number of key factors that he thinks will take the price of bitcoin to $250,000 USD by 2022. Draper specifically addresses regulations, hacking, and security classifications, which have been a major talking point in the cryptocurrency market for some time. He sees regulations as a good thing, and that “cryptocurrencies are the next big technological tectonic shift and governments have to weigh their need to protect investors with their need to be included in this potential economic powerhouse”. Draper clarifies the issue of hacking, and specifically notes that underlying blockchain of cryptos such as Bitcoin have never been hacked into.

“Cryptocurrencies will increase the velocity of money, and the current $86 trillion global market for currency will grow to be about $140 trillion in the next 10 years, and that growth will be in crypto. In fact, I estimate that fiat currencies will actually decrease in use, and that crypto will become as much as $100 trillion of that market,” said Draper. “I expect Bitcoin to be about 10% of that market, or $10 trillion. There is a lot of room to grow there.”

Read the full article here.

3iQ Global Cryptoasset Fund: Price as at June 15, 2018

3iQ is the first regulator approved multi-cryptoasset portfolio manager in Canada, providing accredited investors with exposure to bitcoin, ether, and litecoin through its 3iQ Global Cryptoasset Fund.

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This Weekly Cryptoasset Newsletter is for informational purposes only and does not constitute, either explicitly or implicitly, any provision of services or products by 3iQ Corp (“3iQ”). Investors should determine for themselves whether a particular service or product is suitable for their investment needs or should seek such professional advice for their particular situation.3iQ Corp. makes no representation or warranty to any investor regarding the legality of any investment, the income or tax consequences, or the suitability of an investment for such investor. All content is original and has been researched and produced by 3iQ unless otherwise stated therein. No part of the content may be reproduced in any form, or referred to in any other publication, without the express written permission of 3iQ. All statements made regarding companies, securities or other financial information contained in the content or articles relating to 3iQ are strictly beliefs and points of view held by 3iQ and are not endorsements of any company or security or recommendations to buy or sell any security. No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. By visiting and/or otherwise using the 3iQ website in any way, you indicate that you understand and accept the terms of use as set forth on the website and agree to be bound by them. If you do not agree to the terms of use of the website, please do no access the website or any pages thereof. Any descriptions of, references to, or links to other products, publications or services does not constitute an endorsement, authorization, sponsorship by or affiliation with 3iQ with respect to any linked site or its sponsor, unless expressly stated by 3iQ. Any such information, products or sites have not necessarily been reviewed by 3iQ and are provided or maintained by third parties over whom 3iQ exercises no control. 3iQ expressly disclaims any responsibility for the content, the accuracy of the information, and/or quality of products or services provided by or advertised on these third-party sites. The information contained herein, while obtained from sources believed to be reliable, is not guaranteed as to its accuracy or completeness and confers no right on purchasers. Past performance of cryptoassets is not indicative of future performance and should not be used to forecast any return that an investor may realize.

Fred Pye

Frederick T. Pye


Frederick T. Pye is the Chairman, Chief Executive Officer and Director of 3iQ Corp. He is also the Chairman and Director of 3iQ Digital Holdings Inc. Mr. Pye is recognized for creating and promoting creative and unique investment products for the investment industry.

Mr. Pye has managed private client portfolios with Landry Investment Management and various other investment dealers. Prior to this Mr. Pye was Founder, President & Chief Executive Officer of Argentum Management and Research Corporation, a company dedicated to managing and distributing quantitative investment portfolios including the first long-short mutual fund in Canada.

He was also Senior Vice-President and National Sales Manager of Fidelity Investments Canada and an integral part of the team that saw assets rise from $80 million to over $7.5 billion in assets under management during his tenure. He also held various positions with Guardian Trust Company, which listed the first Gold, Silver and Platinum Certificates on the Montreal Exchange.

Mr. Pye obtained a Masters in Business Administration from Concordia University.