While the trucker convoy protest drags into its fourth week, the Government of Canada has taken up an interesting challenge: tracking and seizing Bitcoin donations being directed to vaccine mandate protestors. Part of the newly enacted Emergencies Act grants the government powers to track cryptocurrencies.
Regardless of whether you agree or disagree with the Canadian government’s actions against these protestors, we must look at how Bitcoin has failed (again) to be the beacon of hope in this situation.
Trucker convoy donations
After weeks of unrest, the authorities in Ottawa have ramped up their efforts to cut funding for the trucker convoy. This week, they deployed the Emergencies Act, which allows them to crack down on crowdfunding and direct bank transfers to supporters of the movement.
However, convoy supporters were turning their attention to cryptocurrencies long before the act was passed. The suspension of GoFundMe and the anonymous hack of GiveSendGo convinced some supporters to move their donations via cryptocurrencies. Bitcoin, of course, was the most popular instrument for this.
Censorship resistance is part of the core promise of Bitcoin. Proponents have argued that a digital currency that isn’t controlled by any bank or government could be useful for activists and protestors.
In recent weeks, this philosophy was being put to the test. A fundraising effort known as HonkHonkHodl has collected 21 BTC, currently worth well over $1 million, and intends to deploy this sum to roughly 200 truckers at the convoy.
However, these efforts haven’t escaped the government’s attention. The bank accounts of those involved in this initiative were quickly frozen, and the Bitcoin was seized and flagged by regulators.
Bitcoin’s failure is partially due to society’s deep dependence on centralized exchanges and banks, which will, realistically, not change anytime soon. Bitcoin has existed for over 13 years and has failed on every promise, including being an inflation hedge and store of value.
The Emergencies Act evoked clearly mentions cryptocurrencies as a target. Federal and provincial police have already sanctioned 34 crypto wallets that they say are tied to the trucker convoy. These addresses hold Bitcoin, Ethereum, Litecoin, Monero, and Cardano.
Ottawa’s prohibition includes banning all FINTRAC-regulated financial institutions from interacting with the identified Bitcoin wallets. Since FINTRAC is the authority that decides whether or not digital currency exchanges can operate within Canada, there’s effectively no way for the truckers to actually sell any of this BTC for CAD to meet their needs.
Even if there was a way to cash out, the government has already seized multiple bank accounts linked to the protests and would easily be able to follow the coins to their final destination and do so again.