The state’s scrutiny of Bitcoin requires well-intentioned actions to be planned meticulously.
The Freedom Convoy bitcoin fundraiser was a success, raising nearly $1 million CAD in bitcoin donations. What better tool to protest a government than a censorship-resistant currency free of state control? But the methods used to distribute funds may be telling.
Bitcoiners rushed to set up their own donation campaign after a Canadian judge froze millions of dollars in GoFundMe donations to the Canadian trucker protests at the end of January. As the campaign gained momentum, many prominent Bitcoiners expressed their support, and some even advised the organizers on distribution, taxation, and legal threats.
This changed on February 14, 2022, when the Emergencies Act was passed in response to the blockade, allowing Deputy Prime Minister Chrystia Freeland to broaden Canada’s anti-money laundering and terrorism financing rules to include crowdfunding platforms and all forms of transactions, including cryptocurrencies. Assertive security expert JW Weatherman demanded immediate distribution of funds, threatening to sue prominent supporters who did not do so before the protest. Fearing legal threats, many prominent supporters went AWOL, some even deactivating their Twitter accounts.
Soon after, debates erupted over the best way to distribute funds to protesters, with many demanding accountability to ensure the funds reached the intended recipients. Nick, who goes by NobodyCaribou, consulted with JW Weatherman about the Freedom Convoy bitcoin campaign. Their goal: to distribute funds to truckers while keeping track of where the funds went.
On Google Docs, people were gathering ideas for disbursement. Not only were people encouraged to openly commit a crime in a public document, but they also proposed tactics that put funds at risk. A video recording of the handing over of bitcoin private keys to truckers allows recipients to be identified using facial recognition software.
As the funds were distributed, videos of recipients accepting bitcoin donations went viral. The issue: bitcoin is censorship resistant, not immune. Doxxing recipients on the internet can lead to bitcoin seizure once individuals are identified. A nation-state seizing money deemed unsuitable, scaring those who may use bitcoin for donations against government oppression in the future. In addition to giving governments and media outlets reason to claim FUD about Bitcoin’s censorship resistance, a possible seizure of funds would give governments and media outlets reason to claim FUD about Bitcoin’s censorship resistance.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.