Casey Wagner

Ottawa acted against the constitution when it froze bitcoin and other assets in an attempt to end 2022 anti-government protests, a federal judge ruled Tuesday. The Canadian government will appeal the decision, Finance Minister Chrystia Freeland said.&nbsp;



Prime Minister Justin Trudeau invoked the 1988 Emergencies Act in February 2022 for the first time in the country’s history in an effort to clear the “Freedom Convoy” and <a href="https://blockworks.co/news/crypto-payments-firms-face-new-restrictions-under-canadas-blockade-crackdown">block financial support to the protesters</a>.&nbsp;



In a decision released Tuesday after three days of arguments in court last April, Justice Richard Mosley said Trudeau’s administration acted outside their authority.&nbsp;



&#8220;I have concluded that the decision to issue the Proclamation does not bear the hallmarks of reasonableness — justification, transparency and intelligibility — and was not justified in relation to the relevant factual and legal constraints that were required to be taken into consideration,&#8221; Mosley wrote.



In a Feb. 15, 2022 statement, Trudeau said the Emergencies Act was his only option as the country had reached a point &#8220;where there is a national emergency arising from threats to Canada&#8217;s security.&#8221;



Truckers and their supporters descended upon Ottawa in 2022 to protest <a href="https://blockworks.co/tag/covid-19">Covid vaccine</a> requirements and other public health policies, blocking a key US-Canada trade route in the process. Donations to the cause poured in from all over the world, particularly in bitcoin after crowdfunding platforms including GoFundMe and GiveSendGo shut down contribution pages.&nbsp;



By late February, protesters had received around 20 bitcoins, at the time equal to about $1 million, through donations via crypto platform Tally. The Ontario Provincial Police and Royal Canadian Mounted Police sanctioned more than 30 crypto wallets it said were tied to the crowdfunding efforts.&nbsp;



Freeland said Tuesday after the decision that the administration stands by their actions.&nbsp;



&#8220;We respect very much Canada&#8217;s independent judiciary. However, we do not agree with this decision, and respectfully, we will be appealing it,&#8221; she said. &#8220;I was convinced at the time it was the right thing to do, it was the necessary thing to do. I remain and we remain convinced of that.&#8221;



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Bitcoin donation freeze was unlawful, Canada judge rules

Sebastian Sinclair

In Canada, the government is entering consultations with crypto industry stakeholders to address the digitalization of money, which it sees challenging democratic institutions around the world.



The North American nation, which includes 10 provinces and three territories, said in its 2022 <a href="https://www.budget.gc.ca/fes-eea/2022/report-rapport/chap3-en.html#a7" target="_blank" rel="noreferrer noopener">budget announcement</a> that digital assets continue to play a pivotal role in sanctions evasion while simultaneously facilitating illegal activity.



The well-worn narrative has been echoed in the past by several major governments around the world including China, the US and India.



In keeping up with the times, Canada said it is seeking to establish a financial sector legislative review to examine the digitalization of money, with a mind to shore up financial sector stability and security. 



The government will meet with those involved with cryptocurrencies, stablecoins and central bank digital currencies (CBDCs) starting this week.



Earlier this year, Prime Minister Justin Trudeau famously quashed bitcoin-fueled protests from <a href="https://cms.blockworks.co/government-crypto-powers-in-spotlight-after-canadian-trucker-protest-is-disbanded/" target="_blank" rel="noreferrer noopener">Canadian truckers</a>, dubbed the Freedom Convoy 2021, who opposed government-imposed COVID-19 mandates.



The truckers managed to raise at least $1 million via the bitcoin-fundraising platform Tally, circumventing monetary controls after they were shut out of other platforms, including GoFundMe, at the behest of Canadian officials.



More recently, Trudeau took aim at elected opposition leader Pierre Poilievre in September, where he labeled his rival’s views and aspirations for the “volatile” asset class as <a href="https://cms.blockworks.co/trudeau-pooh-poohs-rivals-crypto-enthusiasm/" target="_blank" rel="noreferrer noopener">irresponsible leadership</a>.



<h3 class="wp-block-heading">Quebec, Canada to suspend hydroelectricity to crypto miners</h3>



Samson Mow, former chief strategy officer at Bitcoin infrastructure provider Blockstream, told Blockworks he is disappointed in Canada&#8217;s stance.



“The digitalization of money is not the problem here. Money has been digital for a very long time. The issue is that with the advent of Bitcoin, money is now digital but outside of their control,” the Canadian-Chinese national said.



Mow, who now heads up Bitcoin technology firm JAN3 and runs gaming studio Pixelmatic, said Canada had traditionally been hard on crypto, namely bitcoin, in the past.



He said those hostilities included refusing to bank bitcoin companies and denying the allocation of power to mining firms despite Canada having abundant excesses energy.



Indeed, a major utility provider from Canada’s largest province, Quebec, has asked the region’s energy regulator to <a href="https://news.hydroquebec.com/en/press-releases/1884/growth-in-electricity-demand-expected-to-continue-in-quebec/" target="_blank" rel="noreferrer noopener">suspend allocation</a> of hydroelectricity to bitcoin miners.



“Approximately 270 MW were slated to be dedicated to cryptographic use [crypto mining] over the short term, but the allocation of that amount of capacity to this use would increase pressure on current balances,” publicly regulated Hydro-Quebec said in a Wednesday statement.



The country’s stance against miners — those providing security and stability to proof-of-work blockchains, predominantly Bitcoin — has been somewhat hostile in recent years, forcing many of the industry’s largest players to <a href="https://www.coindesk.com/markets/2021/07/12/why-crypto-miners-are-expanding-beyond-quebec/" target="_blank" rel="noreferrer noopener">seek clean energy elsewhere</a>.



“Until governments recognize that money needs to be money and not a tool for surveillance or something they need to ‘manage’ their citizens are in for a bad time,” Mow said.



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Canada Moves To Protect Financial Sector From Crypto ‘Challenges’

<div id="highlights-block_63218e034020c" class="highlights">
 <ul>
 <li>Opposition leader Poilievre’s leadership on crypto is irresponsible Trudeau said</li>
 <li>Individuals who’ve followed the advice of Poilivere would have seen their life savings destroyed, the Prime Minister said</li>
 </ul>
 
</div>



Canada’s Prime Minister has fired a shot across the bow of freshly elected opposition leader Pierre Poilievre, labeling his views on cryptocurrencies as irresponsible, and calling his leadership into question.



Prime Minister Justin Trudeau told a gathered crowd at the <a href="https://www.youtube.com/watch?v=72bvQ-LrQak&amp;ab_channel=CTVNews" target="_blank" rel="noreferrer noopener">Liberal caucus retreat</a> on Monday, individuals could not hope to dodge macro headwinds by diverting their savings towards crypto.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Telling people they can opt out of inflation by investing their savings in volatile cryptocurrencies is not responsible leadership,” the Prime Minister said. “By the way, anyone who followed that advice would have seen their life savings destroyed.”</blockquote>


<div class="wp-block-image">
<figure class="alignright size-full"><img loading="lazy" decoding="async" width="300" height="300" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/09/2022-09-14-Poilievre-shutterstock_2195212295.png" alt="" class="wp-image-31275" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/09/2022-09-14-Poilievre-shutterstock_2195212295.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/2022-09-14-Poilievre-shutterstock_2195212295.png?w=150 150w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/2022-09-14-Poilievre-shutterstock_2195212295.png?w=257 257w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/2022-09-14-Poilievre-shutterstock_2195212295.png?w=261 261w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/2022-09-14-Poilievre-shutterstock_2195212295.png?w=219 219w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/2022-09-14-Poilievre-shutterstock_2195212295.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/2022-09-14-Poilievre-shutterstock_2195212295.png?w=50 50w" sizes="auto, (max-width: 300px) 100vw, 300px" /><figcaption>Pierre Poilievre; Source: Shutterstock</figcaption></figure></div>


Inflation, including other macroeconomic factors such as low wage growth and tailwind pandemic supply shortages, have all but forced individuals to seek <a href="https://www.abc.net.au/news/2021-12-08/cryptocurrency-scams-targeting-australians-losing-millions/100678848" target="_blank" rel="noreferrer noopener">alternative investments</a> in a desperate attempt to stay ahead of multiple crises, including Russia’s war with Ukraine.



Trudeau’s comments come as little surprise, given the recent protests <a href="https://cms.blockworks.co/government-crypto-powers-in-spotlight-after-canadian-trucker-protest-is-disbanded/" target="_blank" rel="noreferrer noopener">earlier in the year</a> involving Canadian truckers who sought to circumvent capital controls placed on them by their government for refusing to adhere to COVID-19 vaccine mandates.



Bitcoin and other cryptos proved to be a useful tool to sidestep controversial financial sanctions, imposed by the Trudeau administration, which saw hundreds of thousands of dollars in BTC reach protestors’ pockets.



Canada’s Prime Minister later reiterated his stance toward crypto, while also taking a shot at Poilievre’s COVID-19 politics.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">We’ve made every effort to work with all Parliamentarians over the years, and we’ll continue to do so. But we’ll also call out questionable, reckless economic ideas – because Canadians deserve responsible leadership.&mdash; Justin Trudeau (@JustinTrudeau) <a href="https://twitter.com/JustinTrudeau/status/1569489032144461827?ref_src=twsrc%5Etfw">September 13, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Poilievre, who won a major landslide victory as leader of the Conservative Party of Canada on Saturday, has continued to publicly advocate for <a href="https://www.cbc.ca/news/politics/poilievre-bitcoin-policy-1.6399986" target="_blank" rel="noreferrer noopener">crypto and bitcoin</a>.



Viewed as a means to “decentralize” the economy, reduce government involvement and pare back central bankers, Poilievre said in March if elected to lead the country, he would normalize crypto.



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Trudeau Pooh-poohs Rival’s Crypto Enthusiasm

<div id="highlights-block_620ae457bcddb" class="highlights">
 <ul>
 <li>Canada’s Prime Minister Justin Trudeau has invoked the country’s Emergencies Act in direct response to ongoing blockades against Covid-19 measures</li>
 <li>The federal government said it was broadening anti-money laundering and terror-financing rules to cover crowdfunding and payment providers linked to them — including crypto</li>
 </ul>
 
</div>



Canada’s Prime Minister Justin Trudeau has invoked the country’s Emergencies Act for the first time in a response to continuing <a href="https://www.youtube.com/watch?v=v3ulXQRTnqU&amp;ab_channel=TODAY" target="_blank" rel="noreferrer noopener">blockades</a> against Covid-19 restrictions.



Under the act, crowdfunding platforms and payment services providers linked to them, including crypto, must now register with the&nbsp;Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). It is unclear at this stage whether the emergency act will impact crypto payment providers in the long term.



Canadian Finance Minister Chrystia Freeland said Monday the federal government was broadening anti-money laundering and terror-financing rules to cover crowdfunding platforms and payment providers they use.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“These changes cover all forms of transactions including digital assets such as cryptocurrencies,” said Freeland. “The illegal blockades have highlighted the fact that crowdfunding platforms and some of the payment service providers they use are not fully captured under the <a href="https://ca.practicallaw.thomsonreuters.com/8-575-5160?transitionType=Default&amp;contextData=(sc.Default)&amp;firstPage=true#:~:text=Glossary-,Proceeds%20of%20Crime%20(Money%20Laundering,and%20Terrorist%20Financing%20Act%20(PCMLTFA)&amp;text=This%20legislation%20combats%20the%20laundering,Centre%20of%20Canada%20(FINTRAC)." target="_blank" rel="noreferrer noopener">Proceeds of Crime and Terrorist Financing Act</a>.&#8220;</blockquote>



As of Monday, all crowdfunding platforms and accompanying payment providers must report large and suspicious transactions to the country’s financial regulator in the same way banks are obligated, Freeland said.



The Emergencies Act, passed into law via the Canadian parliament in 1988, grants the federal government temporary additional powers to respond to public welfare, public order, international and war emergencies.



Invoked as a direct response to the ongoing trucker blockades, which have caused major disruption to cities including the country’s capital Ottawa, the act is designed to counter “illegal” protests over Canada’s Covid-19 restrictions.



Scenes across Canadian cities include blockades caused by large trucks lined up in the nation’s highways and <a href="https://www.youtube.com/watch?v=ytP6F8hKTbA&amp;ab_channel=CNN" target="_blank" rel="noreferrer noopener">trading corridors</a> with the US. The blockades are also causing supply-chain bottlenecks across the country that are affecting Canada’s economy.



Both the <a href="https://cantruck.ca/canadian-trucking-alliance-statement-to-those-engaged-in-road-border-protests/" target="_blank" rel="noreferrer noopener">Canadian Trucking Alliance</a> and the <a href="https://teamster.org/2022/02/teamsters-denounce-freedom-convoy-blockade-at-canadian-border/" target="_blank" rel="noreferrer noopener">International Brotherhood of Teamsters</a> have condemned the protests. The Teamsters said it was “not how disagreements&nbsp;with government policies should be expressed.”



“It is now clear that there are serious challenges to law enforcement‘s&nbsp;ability to effectively enforce&nbsp;the law,” Trudeau said during&nbsp;a <a href="https://www.youtube.com/watch?v=o9gmv8TTzIo&amp;ab_channel=NowThisNews" target="_blank" rel="noreferrer noopener">press conference</a> on Monday. “The consequences on their lives, for choosing to continue to endanger the lives and livelihoods of other Canadians, to continue to violate our laws, are going to be more and more extensive.”



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