What Can We Learn from Canadian Crypto Freeze as War in Europe Rages On
Categories: Crypto News CANADA
Governments have never really been the biggest fans of Bitcoin (BTC) and cryptocurrency. Not only does crypto escape their monopoly over the issuing and supply of money, but it also helps individuals escape any monetary restrictions they may wish to apply. However, Canada sought to strike a blow against cryptoassets last month, following a series of protests against COVID-19 restrictions that began in January. Its federal government invoked the Emergencies Act and issued a number of executive orders against financially supporting the protests, while the Ontario Superior Court of Justice granted a Mareva injunction specifically aimed at freezing the cryptoassets of certain protestors.
A dangerous precedent for Bitcoin?
More than a few analysts expect that the Canadian Mareva injunction makes similar actions likelier in the future, particularly when the wider context is taken into account. “The most recent activity around crypto -- particularly with significant hacks and in conflict areas -- and those governments' involvement signals that governments are interested in controlling cryptoassets more than ever. An undeniable reason for this is that cybercriminals use cryptoassets in illicit activities and can be used to fund wars and terrorist activities,” said Melody Brue, the principal analyst for fintech at Moor Insights & Strategy.
Other figures agree that what the Canadian government did in response to the protests is dangerous for crypto and its holders. For Boolean Fund General Partner and author Mark Jeffrey, they’re “extremely troubling,” not least because it effectively saw the government freezing the accounts of people who financially supported protestors (but didn’t directly protest themselves). According to Jeffrey, Canadian Prime Minister Justin Trudeau essentially invoked the threat of ‘terrorism’ in order to justify bringing in broad, illiberal powers, and now other countries are seeing that his government “got away with” doing so.
“I think other countries may look at how the Emergency Order was implemented and subsequently removed days after being effective. The short timeframe may discourage the use of this as a precedent,” said Torstein Braaten, the head of regulatory affairs and the Chief Compliance Officer at Canada-based crypto-exchange Bitbuy.
Compliance, self-custody, and peer-to-peer
The thing about the emergency orders and the Mareva injunction issued by the Canadian government is that, once they have been issued, regulated crypto exchanges and other crypto-based businesses have no choice but to comply with them.“We are aware of the cryptocurrency alert issued by the [Ontario Provincial Police (OPP)] and [Royal Canadian Mounted Police (RCMP)] and of the Emergency Economic Measures Order. At CoinSmart we strongly believe in regulation, trust, and transparency,” said Justin Hartzman, CEO CoinSmart, a Toronto-based crypto trading platfom.
Given that centralized regulated exchanges have to comply with this kind of order if they want to remain legitimate, it leaves ordinary cryptoasset holders in something of a bind. Assuming that they worry about the possibility of asset freezes, an increasing number of them may turn to self-custody options as a result.“Kraken CEO Jesse Powell said on Twitter that the company could not protect users, and it would be forced to comply if it were in a position of being told by police to freeze assets. Perhaps as the Kraken CEO suggested, the only way to balance the freedom to transact with this potential reality is P2P trading,” she said. Braaten also explains that, ultimately, users will need to use a crypto service provider to convert back to fiat, something which is currently essential given that directly spending bitcoin isn’t really a live option in much of the world.
Active lobbying
There are questions as to how practical and enforceable the Mareva injunction was, given that identification of a named person as the holder of a specific exchange account is not always straightforward. However, looking to the future, the key for the crypto sector will not be to hope that other similar injunctions will be unworkable, but to take an active role in shaping regulations and regulatory actions.
Nonetheless, I can give a few general bits of knowledge on what we can gain from circumstances including crypto freezes and clashes:
Regulation and government involvement: Crypto freezes frequently happen because of administrative worries or government mediation. They feature the significance of states laying out clear rules and guidelines for digital currencies to guarantee straightforwardness, security, and consistence.
Market volatility and risk management: Digital currencies are known for their unpredictability, and occasions, for example, crypto freezes can prompt huge cost changes. It highlights the requirement for financial backers to painstakingly evaluate and deal with the dangers related with digital currencies.
Impact on global markets: Crypto freezes, particularly in a country with huge crypto action like Canada, can have expanding influences on worldwide digital money markets. Financial backers and organizations overall might encounter disturbances or changes in their speculation methodologies because of such occasions.
Cybersecurity and trust: Crypto freezes might be set off by security breaks or worries over illegal exercises. These occurrences feature the significance of strong network safety measures and the need to assemble trust in the crypto environment to draw in more extensive reception.
As to reference to a conflict in Europe, it's significant to perceive that contentions and their effect are perplexing and diverse. The outcomes of wars can change significantly contingent upon the particular conditions and international variables included. While it's trying to draw an immediate connection between a crypto freeze and a continuous conflict, the two circumstances might highlight the significance of solidness, trust, and cautious dynamic in different parts of society, including finance and international matters.