Crypto Under Scrutiny as the Canadian Government Declares Emergency
On Monday, Canadian Prime Minister Justin Trudeau invoked the Emergencies Act—effectively declaring a national public order emergency—in a bid to give the federal government extraordinary temporary measures to handle ongoing protests that started off being against COVID-19 restrictions. The country is also broadening anti-terrorist legislation, which would target crypto and crowdfunding platforms that were used by the protestors to raise funds.
Freedom Convoy 2022 Continues for the Third Week
On January 22, a convoy of truckers from several points started to traverse Canadian provinces, protesting against a new mandate requiring them to either be fully vaccinated when crossing the Canadian-US border or face a two-week quarantine. The protests soon attracted thousands of pedestrian protesters, who believed all Covid-19 preventative measures should be dropped.
This way, what started as a protest against vaccine mandates for crossing the United States border turned into a national rally against all covid health restrictions. Protests even started blockading provincial capitals and border crossings with the United States, which stirred up official backlashes.
On February 12, Canadian authorities started taking action to clear the blockaded Ambassador Bridge into the US. The bridge, which is also the busiest land crossing in North America, was blockaded by over a dozen trucks and smaller vehicles as well as hundred protestors, who dispersed as Canadian police approached.
As of now, the protests are ongoing, with protesters intending not to leave until all COVID-19 restrictions and mandates are repealed. However, officials have voiced concern about the adverse impact of border blockades, which would exacerbate the current supply chain bottlenecks.
Trudeau Invokes the Emergencies Act for the First Time
In a push to end protests, Trudeau has invoked the Emergencies Act. He met with the Liberal caucus on Monday and discussed declaring the public order that would give the federal government extraordinary powers to handle the ongoing protests.
Trudeau insisted that the military would not be deployed, adding that the move would allow the government to take several steps against protestors, like freezing their bank accounts, seizing protesters’ trucks, and suspending their vehicle insurance.
During a news conference Monday afternoon, Trudeau said:
“It is now clear that there are serious challenges to law enforcement’s ability to effectively enforce the law. It is no longer a lawful protest at a disagreement over government policy. It is now an illegal occupation. It’s time for people to go home.”
Invoked for the first time in Canadian history, the Emergencies Act was passed in 1988 and replaced the War Measures Act. Coincidently, the older act was once invoked by former Prime Minister Pierre Trudeau, who happens to be Trudeau’s father. The law states:
“For the purposes of this Act, a national emergency is an urgent and critical situation of a temporary nature that cannot be effectively dealt with under any other law of Canada.”
Meanwhile, not everyone is in support of the move. For one, the Canadian Civil Liberties Association (CCLA), a nonprofit organization devoted to the defense of civil liberties and constitutional rights, has argued that not all conditions necessary for the act have been met, warning that the move “threatens our democracy and our civil liberties.”
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Canada Broadens AML Scope to Include Crypto and Crowdfunding Platforms
Convoy organizers have raised millions to support their protests. They first used the GoFundMe crowdfunding platform to fund their protests. When GoFundMe shut the fundraising campaign down, they turned to the Christian crowdfunding site GiveSendGo. This has arguably pushed the Canadian government to go after financial support for the convoy protests, which are deemed illegal.
On Monday night, Canada’s Deputy Prime Minister and Minister for Finance Chrystia Freeland announced that the federal government is expanding its anti-money laundering (AML) monitoring and terrorist financing laws to cover crowdfunding platforms and the payment service providers they use. She said:
“We are broadening the scope of Canada’s money laundering and terrorist financing rules. The new regulation will include “crowdfunding platforms and the payment service providers they use. These changes cover all forms of transactions, including digital assets such as cryptocurrencies.”
Additionally, the new act would require crowdfunding platforms and payment providers to register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). They will also be mandated to report “large and suspicious transactions” to the watchdog. She said:
“The illegal blockades have highlighted the fact that crowdfunding platforms and some of the payment service providers they use are not fully captured under the proceeds of crime and terrorist financing act.”
However, some in the crypto community believe this is actually against crypto’s core ethos of decentralization. El Salvador’s President Nayib Bukele, who is also pro-Bitcoin, criticized the move, saying that Canadian authorities have zero credibility when it comes to democracy and freedom.
It is worth noting that Canada has been holding a crypto-friendly stance historically. Back in November, Bank of Canada Deputy Governor Paul Beaudry said he does not believe cryptocurrencies are “developing in a way that creates a systemic type of risk for a financial system.” Moreover, the country granted Binance a license for various financial activities in late 2021.
Do you support Canada’s move in expanding its AML monitoring and terrorist financing laws to cover crowdfunding platforms and the payment service providers they use? Let us know what you think in the comments below.
