Freezing ‘freedom convoy’ crypto possible, but faces roadblocks, experts say

The "freedom convoy" organizers' cryptocurrency can be tracked and frozen in many cases, but there are a number of technological hurdles that come with attempted crackdowns.

When the so-called “freedom convoy” pivoted to Bitcoin and other digital assets as a source of funds when traditional channels were cut off, Canadian authorities ratcheted up attempts to police the cryptocurrency space.

Now, with the convoy’s blockades cleared and some of those financial pressures relaxing, continuing efforts to recoup crypto from organizers are facing technological hurdles.

The fresh attention on crypto regulations began when convoy organizers, cut off from funds raised via GoFundMe and other crowdfunding platforms, turned to Bitcoin (BTC) and other blockchain-based assets to fund their ongoing blockades. Some organizer estimates pegged the total BTC raised at roughly $1 million in equivalent Canadian dollars.

When the Liberal government invoked the Emergencies Act, the unprecedented move included language directing financial institutions — including crypto exchanges — to freeze accounts linked to the protests.

Though popular myths surrounding cryptocurrencies might label the emerging digital assets as secretive and untraceable, in Canada where regulations on crypto exchanges have been in place for years, experts say the framework to track down and crack down on the movement of cryptocurrency is already in place.

“I know in the early days of Bitcoin, a common argument was, ‘Bitcoin is just for terrorists because it’s easily obfuscated and they can hide behind the scenes,’” says Michael Vogel, CEO of Vancouver-based crypto exchange Coinstream.

“Well, the irony is, actually every single Bitcoin transaction is recorded permanently.”

That perpetual financial record is a natural feature of the blockchain, the decentralized ledger that underpins cryptocurrencies, non-fungible tokens (NFTs) and a slew of other emerging, high-tech uses.