The Ontario Securities Commission (OSC) recently flagged Brian Armstrong and Jesse Powell — CEOs of Coinbase and Kraken, respectively — for tweets surrounding the Canadian Freedom Convoy protests. Each was accused of offering advice on how to avoid national financial emergency restrictions through the use of self-custody crypto wallets.
Cryptocurrency CEOs Against the Government of Canada
according to one report of The Logic, Kristen Rose — the OSC’s public affairs manager — said the commission is now “aware” of certain tweets critical of the Powell and Armstrong administration. In an email, she told the newsroom that the RCMP and relevant authorities had been informed of the posts.
In recent weeks, the two CEOs have tweeted and retweeted several times opposing Canada’s response to national protests against Covid-19 health restrictions. They have been especially critical of the financial restrictions imposed on those who donate to the movement. One of these restrictions gives financial service providers new powers to freeze user accounts without a court order.
However, the OSC had a particular problem when exchange owners recommended that users hold their cryptocurrency, in the context of government actions. On February 15, Armstrong called Canada’s new measures are “worrying” and provided a link to Coinbase’s self-custody wallet, deeming it “important”.
Powell’s tweet the day before was much more direct, recommending train donors to use non-custodial wallets.
“Crowdfunding platforms are now regulated under the Canadian Terrorist Financing Act,” he said. “Do you see where this is going? Please do not fund claims directly from escrow accounts. I’m sure the freeze orders are coming in. Withdraw to non-custodial before shipping.”
Powell himself sent money directly to ‘Bitcoin for Truckers’ — a protest fundraising event that used Bitcoin’s native TallyCoin crowdfunding platform. After accumulating nearly $1 million in cryptocurrencies for the convoy, the page has been taken down and its organizers are facing legal charges.
The alternative self-custody solution
Bitcoin was fundamentally designed as a “peer-to-peer electronic money system” that does not require third parties to mediate payments. This makes transactions using privately owned Bitcoin very difficult for financial regulators to avoid.
On the other hand, currencies held on exchanges or custodians are just as easy to freeze as fiat currencies held in a bank. Despite his opposition to the restrictions, Powell said his scholarship would reluctantly agree to freeze funds at the government’s request. So he directly advised Kraken users worried about withdrawing their money and donating only through p2p transactions.
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