Did Canada Freeze Cryptocurrency to Stop Protests

Published: April 25, 2024 | Last Updated: April 30, 2024

Markos Koemtzopoulos

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

In this post, I explain how Canada’s government tried to freeze truckers’ cryptocurrency funds during the COVID-19 protests. 

Did Canada Freeze Cryptocurrency

What happened? 

In early 2022 disgruntled Canadian trucker drivers whose business was disrupted due to COVID and who did not agree with the Vaccine mandates blocked a main trade artery leading to and from the United States. Convoy organizers sought support from fundraising platforms and Bitcoin donations.

In a move to restrict protest organizers, the Canadian government issued an order to freeze the truckers’ funds including their crypto assets. 

While it was a peaceful protest, Canadian Prime Minister Justin Trudeau invoked the Emergencies Act after supporters donated more than 20 BTC to the truck drivers via a crypto platform called Tally. Supporters initially used crowdfunding platforms such as GoFundMe and GiveSendGo. However such pages were forced to shut down which is how the movement diverted their efforts to Tally. 

The Ontario Provincial Police and Royal Canadian Mounted Police issued a court order to this platform to shut down its crypto wallets. 

The Canadian Civil Liberties Association and many crypto exchanges condemned the act. Kraken CEO Jesse Powell was particularly vociferous. In a tweet, he says “Due process is for plebs. Might makes right in Canada. If someone dissents, you just confiscate their wealth, revoke their licenses, exclude them from the financial system, and kill their pets. No need to debate the law, policy, or even rights when you have a monopoly on violence.”

Was the court order legit? 

In January 2024 Justice Richard Mosley in a Federal court of Canada ruled that the decision to freeze crypto and other assets was unconstitutional. The government has appealed the decision claiming that it was a national emergency and that Canada’s security was being threatened. 

Did Canada manage to freeze cryptocurrency wallets?

Technically there’s not much you can do to block peer-to-peer payments on a decentralized exchange. What Canadian authorities did do was issue what’s called a Mareva injunction which listed specific crypto addresses that they wanted cryptocurrency exchanges to act on. Specifically, if crypto exchanges were to receive crypto from an illicit address they were instructed to freeze the assets. 

​It wasn’t only the government

The Mareva order was instigated by a class-action lawsuit from civilians who had been negatively affected by the trucker protests. Happy Goat Coffee company says they were forced to shut down three stores due to smashed windows and employee harassment. Other plaintiffs also said that they had been threatened or that their business had been affected by the weeks-long blockade as customers could not reach downtown Ottawa. Ottawa police arrested Tamara Lich, Chris Barber, and Pat King in connection to the complaints. 

Did freezing digital assets work?

The wallets connected to the fundraising are empty. A very small proportion of the funds ended up on crypto exchanges such as Coinbase and crypto.com but it’s not clear if those funds were liquidated into fiat. According to research by CoinDesk 14,6 BTC was distributed across 90 protestors. I could not unearth whether authorities were able to block those wallets from using the funds. 

It’s very likely they haven’t succeeded because as a crypto owner, you can send your assets to different wallets. Also if you a slightly savvy there are few options you have to hide your tracks

  • The first is to convert your Bitcoin to Monero. Monero is untraceable so that nothing anyone can do to block it. For this reason, many exchanges are being forced to delist Monero. However, there are still peer-to-peer platforms where you can exchange Monero for cash
  • The second way is to use a mixer or tumblers. This adds your Bitcoin to an address that mixes it up with other people’s Bitcoin and makes it hard for anyone to trace what’s going in and what is coming out. See the best Bitcoin tumblers and mixers here
  • The third is to move your Bitcoin to new wallets and then try to convert from there. 

On the other hand, most fiat onramps and offramps are regulated meaning it is very hard to convert crypto into fiat currency without providing identification. One way around this is to use your digital currency to buy gift cards or prepaid cards which some platforms in Canada offer. 

References

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Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

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