After the banks, it’s the bitcoin exchanges’ turn: Canada’s government is asking crypto companies to block donations to the Freedom Convoy and freeze donor accounts. Is the? Can Bitcoin save monetary freedom in Canada? Or does the transparency of the blockchain stand in the way?
After enacting the Emergency Act and applying financial reprisals to anyone who participates in or supports the Freedom Convoy with donations, the Canadian government is now targeting bitcoin and cryptocurrencies as well.
This is only logical: Many supporters of the truckers have started donating in Bitcoin after the crowdfunding platform GoFundMe first froze the donations and then paid them back. The GiveSendGo platform, which was set up as an alternative, also had problems paying out the money collected because the partner banks were about to freeze the accounts.
The financial repression of the Ottawa protests is in full swing, and people are increasingly turning to cryptocurrencies in hopes of using them to regain the freedom stolen from the Trudeau administration.
National Police send blacklists to crypto companies
At the very least, the government fears Bitcoin is undermining its financial reprisals. It is therefore immediately trying to close the possible loophole by contacting the stock exchanges and other companies:
We have independently confirmed that the Canadian RCMP has sent out a blacklist notice to regulated Canadian bitcoin companies telling them to report any activity from 29 bitcoin addresses connected to the Canadian Freedom Convoy, including the HonkHonkHodl fundraiser address.
— no bullshit bitcoin (@nobsbitcoin) February 16, 2022
“The Royal Canadian Mounted Police (RCMP) [that is the national police force]has sent a blacklist of Canadian bitcoin companies asking them to report any activity from 29 bitcoin addresses linked to the Canada Freedom Convoy, including also the crowdfunding address of HongKongHodl.”
A scan of the letter is circulating on Twitter and Telegram:
Under the rules of the emergency laws, according to the order, the crypto companies are obliged to “stop every transaction that goes to the following crypto addresses.” In addition to the Bitcoin addresses, Litecoin, Ether, Monero are also mentioned, Ada and Ethereum Classic addresses.
Any available information about transactions to these addresses – or even trying! – Must be reported to the police immediately. Presumably, the report will then be the reason why the government passes this information on to banks – they are entitled to do so under the state of emergency – so that the banks can freeze the corresponding account.
The mere attempt to transfer coins to the truckers should be answered with sanctions, and transfers that were perfectly legal at the time of the transfer will be punished retrospectively with the withdrawal of accounts and accounts.
It’s intense and interesting: neither ransomware, nor hackers, nor fraud, nor drugs, or arms trafficking has elicited any significant response from the Trudeau administration, beyond the usual financial regulation. But the protests of some truckers, whether militant or peaceful, seem to be the red line from which the government begins to create a financial order that under normal circumstances can be called totalitarian without any ifs and buts.
But something else is even more interesting for us. Because Canada of all places is becoming the playing field on which Bitcoin has to prove itself.
It is getting serious!
In Canada, the case that some readers have been discussing here is coming sooner than expected. In the article on Canada’s Emergency Act, I claimed Bitcoin was the solution. Paul disagreed strongly in the comments:
But that you repeatedly see Bitcoin as a solution is something I absolutely cannot understand / sign, and I even have to contradict it very clearly. IF the government in Canada traces transactions, bitcoin may be easier to do than banks or other commercial payment systems. Exchange accounts and custodial wallets are then frozen and that is a feature of Bitcoin that was never addressed. Unfortunately, Bitcoin is not a solution for censorship resistance, large miners in the USA are already censoring transactions. Bank accounts that are connected to these exchange accounts will then probably also be blocked.
This is exactly how it is now. The government is applying the exact measures that Paul prophesied. At least she tries. Can it work? Is Bitcoin NOT the solution? Will Bitcoin not be able to defend itself against government grabbing?
This question, which has been floating around for years, is now getting serious. Can Bitcoin prop up political dissidents when a competent government is trying to prevent it? The fact that this is not happening in China or Russia, North Korea or Venezuela, but in Canada is as surprising as it is shocking.
Donations are NOT anonymous
There are answers for and against Bitcoin on this question.
Paul and others are right when they say Bitcoin is not anonymous. The addresses of the truckers are known, at least in part, and it can be traced on the blockchain which address sends them bitcoins. Donations are NOT anonymous.
When someone buys bitcoins on a Canadian exchange and then sends coins to the truckers, the exchange knows this. It can (or must) block the transaction, freeze the account and report the user. So far so bad.
Even if someone transfers bitcoins from the exchange to their own wallet and from there to the truckers, the trail is recognizable. However, it cannot be proven that it was this very user, which is why there may be some leeway to defend oneself or not to implement the bid. But given the harshness with which the government is currently acting, it is questionable whether this will be relevant.
So far, even worse: Anyone who donates to the truckers runs the risk of getting into trouble, even if they use their own wallet.
The difference between CAN and MAY
But there is also another perspective. Bitcoin transactions are not anonymous. However, if you send them from your own wallet, the Canadian government cannot block them, and if the recipient is using their own wallet, the government cannot have the donations confiscated.
It’s not perfect because the user still has to expect sanctions – such as withdrawal of the bank account. But there’s a huge difference between breaking a law and being punished for it, and breaking a law just plain IMPOSSIBLE. In one case, an uprising is possible if the government goes so far as to make citizens accept fines in order to protest—in the other, an uprising is not possible even if the citizens were willing to pay the price.
Of course, the truckers will have problems exchanging the coins for Canadian dollars because no exchange is allowed to give them an account and no bank is allowed to give them an account. However, no one can stop them from buying food or gas from supporters with bitcoin.
So far so good: Bitcoin is a significant improvement over traditional finance.
Gain more anonymity
Canadians also have a number of ways to evade observation:
1.) You can use Lightning
2.) You can use CoinJoin or other mixing methods
3.) You can at least blur the proof of authorship through multiple transactions
4.) You can send the bitcoins to foreign exchanges or platforms, which are presumably far are under less pressure to obey the Trudeau government
5.) The truckers can receive bitcoins “smarter” by using new addresses per transaction. This is not a panacea, but it makes timely monitoring more difficult.
It’s hard to say if these options are enough to break the Trudeau administration’s financial reprisals. But they should at least complicate them in ways that traditional finance doesn’t.
We cannot answer this question conclusively. Financial repression also applies to cryptocurrencies – but much less pervasively and hopelessly than with banks.
The level of financial repression
A Bloomberg report, meanwhile, highlights the shocking extent of the monetary repression. It’s hard not to see what’s happening in Canada as a complete financial cleansing of anyone who even dares support the truckers’ protest.
” Trudeau’s anti-protest bill sweeps Canada’s financial sector ,” headlines the news service. The new rules mandate “a broad list of entities, including banks, investment firms, credit unions, loan companies, stockbrokers, fundraising platforms, insurance companies and charities.” These must determine whether they are “owned or controlled by property” of any person “participating in illegal protests or supporting protesters.”
Note the wording: As soon as the government has declared a protest illegal – there is no legal verdict, only the repeated mantra of the Trudeau government that the blockades are “illegal” – participants and supporters are also threatened with retrospective sanctions. If the service providers approached identify such a person among their customers, “they must freeze their accounts and report them to the police or the secret service.”
So: If someone has donated to the truckers, for example because he is against compulsory vaccination, then not only his account MUST be frozen, but also his stock account and his insurance. Financially, the ground is to be completely pulled out from under his feet.
Regardless of what you think of the truckers – whether they are Nazis, whether their protest is legal or not, whether they are only demonstrating against compulsory vaccination or planning a coup, whether they are sabotaging the country or not, whether they are using violence and chaos spread or demonstrate peacefully: what the Trudeau government is pulling off is not worthy of a Western, free, democratic constitutional state.
It may be that there are circumstances that justify giving up (temporarily) the ideals of a western constitutional state. But Trudeau neither clearly stated nor proved them, nor did he initiate other attempts to resolve the conflict. So far he has not even spoken to the truckers or even addressed their actual demands.
Is a bank run already building?
Western politics seems largely paralyzed by the fact that the nice Mr. Trudeau reveals his totalitarian grimace. Not a word of protest, no condemnation, no threat of sanctions, not even a warning. The brutal actions of Trudeau’s government – would regime be the right word? – is becoming a disgrace not only for Canada, but for the entire West.
One can hope, however, that the market will punish the Trudeau administration for its totalitarian measures without the aid of foreign politics. Because the instrumentalization of the banks for political punishments seems to be having its first consequences.
A Google analysis , for example, shows that at least the fear of a bank run is exploding in Canada.
“bank run” trending in Canada 👀 pic.twitter.com/ZWWLAa2rcn
— Alex Svanevik (@ASvanevik) February 17, 2022
In addition, there are reports that the country’s major banks have had numerous outages over the past 48 hours – perhaps because Canadian citizens are withdrawing too much money or sending too much money abroad. However, the banks may have suspended the service only briefly to install an update or freeze accounts. And maybe it’s a hoax. The situation is confused.
BANK Outages at all big 5 banks!
Trudeau has crushed consumer confidence in the banks in less than 48 hours. Some ATMs are still allowing cash to be pulled out but going empty.
The bank has now locked up EVERYONES funds!
🇨🇦 🔔 pic.twitter.com/9CslynYJjD
— bu/ac (@buperac) February 16, 2022
Here, too, the fear of bank failures is reflected in a Google analysis:
All of this is far from evidence that a bank run of any kind is taking place. But they are two delicate clues, and those alone are menacing.
On the other side even CEX crypto exchanges are worried about these new measures taken by the Canadian gevernment.
Kraken CEO Jesse Powell said in comment on Twitter about new Canadian legislation:
” If you worried about your assets being frozen don’t keep your funds with any centralized/regulated custodian. We cannot protect you, cash out and only trade p2p.”
It is the first time a CEX Ceo rises the alarm to take crypto out of centralized exchanges.