Over the past week, there has been much discussion about Canada’s ‘freezing’ digital currency accounts that are linked to a Canadian trucker’s freedom convoy. Amidst the occasional conversation, it should be emphasized that decentralized cryptocurrencies such as bitcoin and ethereum cannot be deposited directly within the network. However, the Canadian government can mark specific digital currency addresses and take this even further, asking centralized entities such as crypto exchanges and payment processors to freeze funds.
Canadian authorities can flag crypto addresses and threaten exchanges, but they can’t ‘freeze bitcoin’
Last week, the Canadian government and Prime Minister Justin Trudeau invoked the country’s Emergency Act and invoked Canada’s terrorist financing policy to blanket cryptocurrency donations. Trudeau and the government did this to crush the protesters who were taking to the streets of Ottawa.
The Canadian government managed to shut down Freedom Convoy’s fundraiser to GoFundMe and it reportedly flagged 34 crypto addresses associated with the crypto fundraiser. Reports indicated that Canadian police had sent letters to banks and crypto-asset exchanges insisting that companies “stop facilitating any transactions” with the above flagged addresses.
According to several financial institutions and crypto companies, the Royal Canadian Mounted Police (RCMP) did indeed send the letters. Furthermore, another report noted that an Ontario Superior Court judge ordered financial institutions to freeze any assets associated with Freedom Convoy, including digital assets.
The order is reportedly derived from a “secret hearing” initiated by Ottawa residents and attorney Paul Champ. “I can confirm that this is the first successful Mareva order targeting bitcoin and cryptocurrency exchanges in Canada,” Champ explained to the press.
Meanwhile, despite headlines talking about a direct freezing of cryptocurrency assets, it should be noted that this can only happen by threatening enforcement and targeting the crypto-to-fiat off-ramp.
Yesterday, the Ontario Superior Court of Justice sent us a Mareva injunction, ordering us to freeze and disclose information about the properties involved. #freedomconvoy2022 Speed.
Here is our official response. pic.twitter.com/iuxliXhN5y
— nunchuk_io (@nunchuk_io) February 19, 2022
It is impossible to freeze a Bitcoin (BTC) or Ethereum (ETH) address and make it useless to the owner. The only way to do this is to use force or imprisonment or death threats and eventually obtain a crypto owner’s private key. This is why fundraisers like BTC Fund raising 21 bitcoins, Use multi-signature controls,
According to the software developers behind the non-custodial bitcoin wallet Nunchuk, the team was sent a Mareva injunction letter. nunchaku replied to the letter Sent to the Ontario Superior Court of Justice and told the court that he could not comply with the orders.
“Dear Ontario High Court Judge, Nunchuck is a self-defense, collaborative, multi-sig bitcoin wallet,” the letter from the Nunchuck team said. “We are a software provider, not a security finance intermediary. Our software is free to use. While protecting privacy, it helps people eliminate single points of failure and protect bitcoin as safely as possible. ” Nunchuck’s letter adds:
We do not collect any user identification information beyond email addresses. We don’t have the key. So: ‘Our Users’ properties cannot be disabled. ,[We] “Cannot block transaction.” We do not know the ‘appearance, nature, value and location’ of our users’ assets. See how self-defense and personal keys work. When the Canadian dollar is worthless, we will be here for you.
Kraken CEO Jesse Powell: ‘We Can’t Protect You – Stick to Real Crypto’
Kraken CEO Jesse Powell explained on Twitter that people who are concerned about freezing their crypto funds should not hold crypto on a centralized platform. answer someone Comment Regarding the freezing funds of crypto exchanges, Powell said that this was “100%” the case.
Powell said, “100% yes it has/will happen and 100% yes, we will be compelled to comply.” “If you’re concerned about this, don’t keep your money with a centralized/regulated custodian. We can’t protect you,” Powell Tweeted, Later TweetPowell discussed that it may not be safe to go on-chain for top-reserved tokens such as stablecoins.
“You don’t necessarily have to be safe only on-chain,” Powell said. “Top reserve tokens with centralized issuance and redemption like USDT and USDC have centralized control of freeze functionality that can be controlled as easily as a bank account. Stick to real crypto,” he said. Both issuers have frozen specific stablecoin addresses in the past.
In July 2020, Circle’s Center Consortium blacklisted $100,000 in USDC after receiving a request from law enforcement. Tether has blacklisted hundreds of USDT addresses and last month, the company froze $160 million worth of USDT. So while digital currency exchanges, crypto payment processors, financial institutions, and banks may “stop facilitating any transactions” with crypto addresses, decentralized assets or “real crypto” cannot be commanded unless Private keys of accounts are not captured by threats or physical force.
What do you think of Jesse Powell’s comments that exchanges haven’t been able to protect you and sticking with his ‘real crypto’ statement? Let us know what you think about this topic in the comment section below.
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