• Canadian truckers protesting Covid vaccine mandates raised more than $1 million in bitcoin
  • The bitcoin fundraise came after the collective was banned from GoFundMe and another crowdfunding platform

A loose collective of Canadian truckers protesting Covid vaccine mandates are in the crosshairs of a controversy they hadn’t bargained for: whether the government can cut off their access to bitcoin.

The truckers, dubbed The Freedom Convoy 2022, were first banned from GoFundMe as the Canadian government began to crack down on their fundraising efforts. Then, competitor GiveSendGo gave them the boot. Protestors have since raised more than $1 million via bitcoin-fundraising platform Tally. 

Although Canadian police broke up the protest in Ottawa over the weekend and a key US-Canada trade route that had been blocked by protestors reopened, questions remain over the security of the crypto funds dissidents raised. 

The Freedom Convoy 2022 | Source: Shutterstock

Canadian Prime Minister Justin Trudeau invoked emergency rules last week freezing truckers’ bank accounts — and attempted to do the same with their bitcoin wallets. However, whether the government can keep the protesters away from bitcoin is another question entirely. 

Protestors also set up a number of smaller wallets on Ethereum, Cardano, Ethereum Classic and Litecoin as they snarled key international thoroughfares with semi-trucks and defied repeated police orders to disperse. 

Although the government has the power to block crypto exchanges operating under KYC (know your customer) requirements, nothing is stopping the dissidents from creating a whack-a-mole series of crypto wallets and washing — or laundering — bitcoin via services such as CoinJoin.

Even if the truckers take those precautions, though, the government could still take action later. Chen Arad, co-founder of crypto trading surveillance platform Solidus Labs, told Blockworks opening new wallets would be “doomed to fail,” likely leading to future indictments.

“It’s immutable,” Arad said of the blockchain. “It’s always there. It’s very hard to hide if you’ve done something on a public blockchain.”

Others say Trudeau’s undertaking may cause some immediate headaches for the truckers but cast doubt on the government’s ability to thwart the cashing out of bitcoin. 

Cory Klippsten, CEO of exchange Swan Bitcoin, said the situation is an opportunity for savvy bitcoiners to help the truckers “sidestep” the bid to “essentially freeze off-ramps.”

It was a matter of time before lawmakers tried to seize bitcoin, Klippsten said, a concern that has been overlooked as the cryptocurrency has, relatively unchecked, exploded in adoption in recent years.

“We’ve been kind of lazy, because, recently, no one was cracking down, and in the developing world there was no infrastructure to try to stop it, so basically there was this null set of circumstances where a capable government with the ability to overreach could try to do that,” Klippsten said. 

If the protesting truckers have already set up a wallet on a KYC exchange, it may be too late for them to shield its contents from the authorities. Steve Halborn, co-founder of crypto cybersecurity company Halborn, said the safer route would be to set up a wallet via Bitcoin core technology or tap another source, such as Trezor, to set up a mnemonic phrase that’s not connected to an exchange. 

Another option: using the Lightning Network, a layer-2 application built on top of the Bitcoin blockchain that enables faster transactions, to transfer bitcoin and not settle the transaction on the chain itself. 

“There’s the whole KYC of having a wallet generated within an exchange, so Coinbase and Kraken and all of the ones that comply with government legislation and regulation — they can certainly freeze funds held there,” Halborn said.

Indeed, Kraken CEO Jesse Powell tweeted Feb. 17 that the police freezing cryptocurrency on the exchange “100%” has already happened and will happen in the future. 

“We will be forced to comply,” Powell wrote. “If you’re worried about it, don’t keep your funds with any centralized/regulated custodian. We cannot protect you.”

Steve Gormley, CEO of crypto ATM provider CoinMover, cast doubt on the government’s know-how to pull off a seizure, saying the digital assets understanding of lawmakers is still in its infancy. 

“This is not something the government is going to get its arms around, and frankly, there’s too much big money involved,” Gormley said. 

There is precedent — not least in the US government’s record recovery of $3.5 billion of stolen bitcoin in recent weeks. Granted, the couple accused of stealing it had stored their seed phrase on the cloud.

“What they tried to do is execute thousands of different transactions to launder the money,” Arad said. “It didn’t help. The exact opposite happened, actually. The fact that it was on the blockchain helped law enforcement recover it in a far more effective way than ever before.”

Regulation — which heightens the powers of law enforcement in crypto — is a necessary prerequisite for mass adoption, according to Maksim Hramadtsou, founder at crypto trading firm GoodCrypto.App. 

“Of course, if you are a true crypto believer that believes that crypto shouldn’t be under government control and whatnot, then that’s bad,” Hramadtsou said. “But the same people that want bitcoin to be decentralized and not controllable by anybody — they also want mass crypto adoption.” 

In the meantime, before mass adoption happens, lawmakers may have an easier time cracking down on blockchain-based crime as they gain expertise in the nascent technology.

“What’s also been interesting in how regulators approach this is it’s very probable that it would be easier for them to get to someone who did something wrong now than five years ago when it was a suitcase full of dollars,” Arad said.

Either way, investigators are unlikely to let up their efforts before mastering policing of both crypto and fiat currencies.

“Apparently, governments are trying to give an impression that they can control it, and they can control it in the way they control the onramps and offramps of anything that touches the real world,” Hramadtsou said.


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  • Managing Editor
    Michael Bodley is a New York-based managing editor for Blockworks, where he focuses on the intersection of Wall Street and digital assets. He previously worked for the institutional investor newsletter Hedge Fund Alert. His work has been published in The Boston Globe, NBC News, The San Francisco Chronicle and The Washington Post. Contact Michael via email at [email protected]