Introduction

Over the past month Canada has been experiencing a wave of protests, government overreach, and international attention not experienced for years and some would say ever. And in the maelstrom of truckers blasting their horns, politicians labeling people racists, and residents counter-protesting it has possibly become clear why Bitcoin, cryptocurrencies, and decentralized methods of transactions are needed for the future of average citizens in all parts of the world.   

I didn’t think I’d ever be using Canada, one of the most progressive and liberal countries, as an example for the authoritarian fears many cryptocurrency supporters hold. It’s honestly been a bit weird preparing this episode as I see my home country being flung into a state of chaos, but the situation was so evident and blatant that I thought it would be valuable for others to hear who haven’t been paying close attention to what was going on there.

Whether you are for or against the mandates, think the protesters were racist white supremacists or a diverse group of freedom loving blue collar workers, or think that the protest itself was illegal and harmful to the residents of Ottawa or was a necessary act of free speech expression and peaceful civil disobedience is really, in my opinion, missing the larger point.

Context of Trucker Convoy Explain What Happened

I’m not here to argue for or against the mandates and what the truckers were pushing against. It’s a very conscientious issue and one that obscures the more important problems that were raised during this crisis. But a bit of context is necessary to frame how Bitcoin plays a role.

Essentially Canada is one of the few remaining countries to have strict covid policies even as we saw other countries open up and lift covid passports and other restrictions in light of the reduced severity of Omicron. And when a new restriction was put on truckers requiring a vaccine passport to travel between the USA and Canada, the protest was sparked.

For some further context the truckers were deemed as essential workers during the quarantine period and were hailed as one of the groups of heroes who kept the country running while most of us were hunkering down during our quarantines ordering off of Amazon. They were also already 90% vaccinated, and generally their work is already quite isolated so the argument as to why this was being imposed on this group specifically was confusing.

A cross Canada convoy began from Vancouver and ended up in Ottawa where a few thousand hauler trucks parked outside of parliament and began protesting to end the mandates against truckers, and grew to desire all covid restrictions to be lifted.   

Again, I’m not trying to make an argument one way or another as I think this is mostly a distraction from the larger issue at hand, but it is useful to know a bit of the context surrounding the convoy. Now without going into all the political specifics, what many argue was the beginning of the ensuing chaos, was our Prime Minister Justin Trudeau began labeling the protesters racists, Nazis, a small fringe majority holding unacceptable views, and part of the misogynist and white supremacists unvaccinated cohort, according to him. 

• It is true some of the protest organisers had previous affiliations with white supremacist groups, but there were also first nation and Jewish representatives amongst them, and no official message of hate, bigotry, or racism of any kind was put forth. 
• A single Nazi flag was seen at the protest (though there are discussions that the protester was warning people about the government becoming like the Nazis rather than being in support of them). But if you were to watch any of the livestreams of the actual protesters themselves it became pretty obvious that they were made up from a very diverse range of nationalities and the protest itself had children, ice skating rinks, and even a handmade hot tub, which was useful in the minus 20 degree weather. And importantly, both unvaccinated and vaccinated people made up the protesters.  
• There was validity to the counter protesters, most of which were Ottawa residents who had their community disrupted with constant air horns being blasted and the general disruption of their city. However there were reports of truckers cleaning the streets of trash, feeding and supporting the homeless, other residents showing their support to the truckers, and emergency lanes being kept open. But I wasn’t there so I can’t really comment on this part.  

But what you or I think isn’t really relevant to my larger point, but what was problematic was that our Prime Minister, by labeling the protesters as undesirables, essentially broke any chance for a solution through dialogue because then he would either be willing to talk to Nazis, or would prove that he was lying to begin with. 

Now onto the interesting part… 

As dialogue was not an option, the truckers, rather than quitting and going away after a few days of the brutal Eastern Canadian weather, stayed. And to help pay for fuel to keep their cabs warm, and stomachs full, a crowdfunding campaign was started with the American GoFundMe platform. In around 2 weeks about 10 $million was raised. And it was promptly frozen by GoFundMe at the behest of the Canadian government. GoFundMe then stated they would not be refunding the donations but rather repurposing the money to charities of their choosing.

There was also a push by the Ottawa government to have the funds redirected to the police and the city to pay for the almost 800k per day price tag of dealing with the protesters. I was unable to dig up the exact law that was broken by the protesters (if you know please tell me), but it was clearly said multiple times that the protests were unlawful, illegal etc, and this was the justification given to the platform to shut down the funding for the protesters. After international backlash at essentially taking the donations, GoFundMe did backtrack and begin refunding donations but none were given to the truckers from the platform. Another alternative platform GiveSendGo received several million dollars in donations and was also shut down, this time through a court order. 

So this starts to lead us to the idea of the importance of cryptocurrencies and Bitcoin. You have protestors, and acts of civil disobedience against an unfavorable government policy, and the financial support for that cause is completely blocked from any crowdsourcing attempts. But it only got worse from here.      

EMA and Personal Financial Accounts Frozen

On February 15th, Justin Trudeau enacted the Emergency Measures Act (EMA) of Canada, giving the government immense power to deal with the protesters as well as having later repercussions which I’ll get into at the end. For those of you outside of Canada and unfamiliar with this act it  

“came into force in 1988, and allows the federal government to take “special temporary measures to ensure safety and security during national emergencies”. It is a temporary, 30-day measure that comes into effect immediately when invoked. But the Act must get approval within seven days from Canada’s Parliament.”

It replaced the War measures Act which had only ever been used during WW1, WW2, and during a real terrorist event in the 1970s. 

Following the EMAs enactment there were constant debates in parliament, the press, and generally across the country about whether it was needed or if the current laws were sufficient to deal with the protest, about whether the protest constituted a threat to the security of Canada, and whether Canada had just turned into an authoritarian regime or not. But most relevant for this podcast, was one of the first actions that was taken, the ability for banks to “immediately freeze or suspend bank accounts without a court order and without fear of civil liability.” Essentially, anyone who had partaken or supported the protest could have their accounts frozen. “In addition, the government broadened the scope of Canada’s anti-money laundering and counter-terrorist financing rules to cover crowdfunding platforms and the payment service providers they use.”

Over 200 accounts were frozen over the next week. It was claimed that this was done predominantly to the truckers and other protesters that refused to leave the protest area, though there were also reports that people who had donated to the crowdfunding campaigns had their accounts frozen. Anyone who had their account frozen, and left the protest area should have seen their accounts unfrozen or begin having this process underway. 

Before touching on the importance of cryptocurrencies as it relates to all this, one final point should be brought up. 

One of many arguments proposed by the Canadian government for enacting the EMA and going after the finances of the protesters was the involvement of nefarious foreign actors attempting to impact, undermine, or generally disrupt Canadian security by funding the protests. This is pretty serious language and escalated the situation and importance of the protests in many people’s minds.

When it comes to these situations is more or less impossible to know exactly what is going on at high levels of government, but, on a rare bit of transparency, Canadian news media published comments from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). FINTRAC facilitates the detection, prevention, and deterrence of money laundering and the financing of terrorist activities in Canada. And during this period the deputy director said he hasn’t seen a spike in “suspicious” transaction reporting amid concerns about the sources of funds pouring in for the “Freedom Convoy.”

Though this may have changed later on what we essentially see is the agency responsible for tracking problematic transactions saying there is no worry, and the government in charge saying the opposite, and using this fear as part of their justification for bringing about substantial powers that had only been used in WW1, WW2, and during actual terrorist activity in the 1970s. 

How Does Bitcoin Tie Into All Of This? 

One of the fundamental ideas behind cryptocurrencies is holding your own private keys. “You can think of the private key as a password that unlocks the virtual vault that holds your money. As long as you — and only you — have access to your private key, your funds are safe and can be managed anywhere in the world with an internet connection.” Essentially you are acting as your own bank. This is also why cryptocurrencies have been used on the black market for drugs, weapons, stolen property, even possibly assassinations, and is why for years there was a strong push to have cryptocurrencies attached to these types of transactions and not to the more liberating ideas it was intended for.

In fact, in Satoshi Nakamoto, launched Bitcoin’s Genesis Block on Jan. 3, 2009, they left a timestamp referencing The Times newspaper’s front page from the same day. The “Chancellor on brink of second bailout for banks” in reference to the financial crisis and the general disdain that Satoshi had for banks, their power to control our hard earned money, and some would say the actual reason that Bitcoin was created in the first place. 

But, unlike your money being held in banks, your cryptocurrency funds cannot be frozen due to your political beliefs not being in line with the main government narrative, because there is no bank or third party a government or other entity can put pressure on. And this is why Canada may have just made the case for Bitcoin and crypto in general. 

If you disagree with the policies your government is enacting and want to show support financially there is a real risk that the digital instruments to do so can be shut down. Though previously this argument always teetered on the conspiracy theory lines, harkening back to communist Russia or other modern failed states where this was common practice for the corrupt governments, the fears were always explained that these type of ideas would never happen in a modern, liberal, western democracy. Or so it would seem until now..

Now an argument that these worries might also be overblown a bit is certainly justified. There were ‘only’ 200 accounts frozen, most are now unfrozen, the emergency act has been repealed, and the protests are nowhere near as strong as before. But if we dig just a little deeper there might be more justification than previously thought.  

Tools That linger After Canada’s EMA

Even though the EMA has been repealed, financial ‘tools’ have now been put permanently in place. The government is broadening the scope of Canada’s anti-money laundering and counter-terrorist financing rules to now cover crowdfunding platforms and the payment service providers they use. 

Not only is this worrisome for now, but this opens the door wide open to future governments who may have a completely different take on what constitutes money laundering or nefarious activities. Want to protest against the pipelines and polluting oil freighters on the West coast? How about support pro indigenous land rights rallies? Have a difference of opinion on climate change? Russel Brand has a great short video on this if you want to hear more while also having a bit of a laugh. 

These tools are now available to quell dissent by limiting financial activity, and perhaps by employing the same rhetoric of nefarious foreign actors future crowdsourcing actions can be fully stopped again. I think grassroots movements took a big hit in Canada this month, and if the same tactics are used it could bring the same issue in other countries. 

The Concern About Digital Currencies

The final concern that this event raised is much larger is scope. I’ve covered pilot projects and experiments with government issues digital currencies numerous times in previous podcast episodes over the last 2 years. Most notably there have been several projects in China that span entire regions consisting of millions of people. Especially due to the pandemic there has been a large push to have countries in the west start to think about adopting a digital dollar, euro etc. Though I’ve generally been a fan of the efficiencies this would bring, the issues that the trucker protest in Canada I think have raised some very serious and fundamental concerns about what a system like this could bring about. If due process can be so easily disregarded and digital means of fundraising and even personal accounts can be frozen literally overnight in a country like Canada, I hate to imagine what possibilities could be in other countries…

One of the ways the truckers were able to keep protesting even without the GoFundMe money was that residents of Ottawa were physically coming and delivering cash and supplies to them. If countries shift to a digital currency, these types of acts could quite possibly no longer be carried out….unless people use Bitcoin of course 😉

But Bitcoin Access Was Frozen As Well!

One final point to consider. When the EMA was enacted not only bank accounts were frozen but Bitcoin holdings were as well. This might sound like a contradiction to what I said above but there is one clear difference. Only those crypto funds that relied on a third party were impacted, ie. on a centralised exchange. Any crypto that was held by individuals using their own private keys was completely unimpacted, along with any decentralized exchanges. The following email screenshot between the Canadian Government and a decentralised exchange was shared by some friends and offers some hope in this unwelcome dark tunnel we have found ourselves in. 

“The Superior Court of Ontario has asked the decentralized wallet team @nunchuk_io to provide their users’ information and freeze their accounts.

The team’s response is awesome!  Especially the last paragraph!”