Bitcoin’s censorship challengers enter the spotlight

Amid the bombardment of last week’s regulatory news, from rumors of Joe Biden’s upcoming executive order on digital assets to another round of the Russian government’s crypto tug of war, as well as the perceived social effects of crypto has been the one around the Canadian government’s standoff with the Freedom Convoy.

The government’s invocation of emergency powers to put down a protest movement, combined with the movement’s financial infrastructure being one of the main attack vectors, has led many observers to appreciate with renewed vigor Bitcoin’s capacity to resist state financial censorship.

If a government as “civilized” as Canada’s can arbitrarily cut off a group it doesn’t like from the financial system, then any state can potentially do the same to any group, the argument goes. While there is, as always, much more nuance to this situation. What matters is a simple, digestible notion with which the global audience walks away from the shocking news. So far, the main takeaway seems to be this: Financial censorship is scary, but crypto offers a way around it.

A series of protests and blockades against COVID-19 vaccine mandates in Canada has been ongoing since mid-January 2022. By mid-February, the impediment of transport infrastructure and general economic and social costs of the unrest have led the Trudeau government to consider extreme measures, such as the invocation of the never-before-used Emergencies Act to suppress the protests.

The measures included broadening the scope of Terrorist Financing rules, specifically targeting payment service providers and crowdfunding platforms that the protestors used. By that time, the Freedom Convoy had amassed a sizeable bag of crypto donations, which the government proclaimed fair game as well.

Jesse Powell, co-founder and CEO of crypto exchange Kraken, condemned the government’s actions but said that if told to freeze assets by police extrajudicially, the platform would “probably consent.” Powell also advised anyone concerned about government overreach to move their funds away from centralized custodians and trade peer-to-peer:

Many of those who condemned the government’s actions as overreach admitted that they were not particularly sympathetic to the protestors’ core message. The general sentiment of the crypto folk, however, was largely in line with the maxim “I disapprove of what you say, but I will defend to the death your right to say it”.