Canada Regulates Crowdfunding Platforms and Crypto with Terrorist Financing Act

The Canadian government, for the first time, invoked the Emergencies Act to stop the more pernicious aspects of the COVID-19 trucker protests. Accompanying this is the freezing of accounts of truckers involved in the protests and the requirement of crypto payments providers to register with FINTRAC.

Amid the ongoing convoy of truckers protesting COVID-19 mandates, the Canadian government has taken the unprecedented step of invoking the Emergencies Act. As a consequence, crowdfunding platforms and cryptocurrencies are regulated under the Terrorist Financing Act.

Prime Minister Justin Trudeau made the announcement on Feb 14. With it, the government can make use of the military to curtail the protests, though Trudeau said that it did not intend to do so. However, the act does allow for the government to suspend the right of citizens to free movement or assembly — but again, it does not want to do so.

Preventing the financing of the activities is the key priority of the government at the moment. This includes cryptocurrencies, which have played a part in this financing. Personal and corporate accounts can now be frozen, meaning that the accounts of truck owners involved in the blockade can be frozen.

Crowdfunding platforms and payment providers must also register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Large donations must be flagged.

It’s possible that the government will be more forgiving of cryptocurrencies as the protests dissipate. However, in terms of its reputation, the damage might be more long-lasting. It remains to be seen what sort of an impact this might have with respect to cryptocurrencies.

Frozen accounts and large crypto donations under the scanner

Crypto proponents, whatever their stance on the protest themselves, will take some affront at the act of freezing accounts. It goes against the principle of cryptocurrencies, which has flourished partly because it distances itself from governmental control.

The invocation of the act has led to TDBank freezing a large number of donation funds. Some prominent figures have criticized the move, saying that it goes against the principles of democracy.

Most figures in the industry are yet to comment on the matter. Cryptocurrencies are popular in Canada, and it has even launched a Bitcoin ETF. But it would not be surprising to see some disapproving responses from the crypto community.