Canada’s use of law freezing protesters’ crypto donations was unconstitutional: Court

A federal judge said there was no national emergency justifying the invocation of the emergency law which gave the government the power to freeze assets.

The Federal Court of Canada has ruled that an emergency law that gave the government power to stem the flow of funds and crypto to support protesting truckers was unreasonable and unconstitutional.

In a Jan. 23 decision, Justice Richard Mosley concluded “there was no national emergency justifying the invocation of the Emergencies Act and the decision to do so was therefore unreasonable.”

In February 2022, Prime Minister Justin Trudeau’s government used the laws for the first time to freeze funds, including cryptocurrencies, donated to truckers protesting COVID-19 restrictions — which the court found was unconstitutional.

So-called “Freedom Convoy” protesters used trucks to block streets in the nation’s capital, Ottowa, to protest mandates that required truck drivers crossing the Canada-United States border to be fully vaccinated against COVID-19.

At the time, the government claimed invoking the Emergencies Act was needed as the protests were an illegal occupation.

The Canadian Civil Liberties Association (CCLA), the Canadian Constitution Foundation, and other groups challenged the government’s use of the emergency law to freeze the flow of funds, arguing it was unnecessary and unconstitutional.

Following the decision, the CCLA said it “sets a clear and critical precedent for every future government.”

Mosley said the government “cannot invoke the Emergencies Act because it is convenient, or because it may work better than other tools at their disposal or available to the provinces,” arguing it should be a tool of last resort.

Finance Minister Chrystia Freeland said the government will appeal.

Related: Crypto donations to surpass $10B in a decade

Cryptocurrency played a major role in funding the 2022 trucker protests, with protesters estimated to have received millions of dollars, but the exact total raised remains unclear due to challenges tracking decentralized digital assets.

In February 2022, GoFundMe froze more than $9 million in donations that had been raised for the protests. Organizers moved their efforts to Tallycoin, a crowdfunding platform built on the Bitcoin blockchain where the HonkHonk Hodl group raised over 22 Bitcoin (BTC) worth around $925,000 at the time.

The Christian crowdfunding site GiveSendGo also became a popular donation platform, raising over $8 million for the truckers, including unspecified amounts in crypto. However, Canadian authorities later froze bank accounts connected to GiveSendGo donations.

At the time, crypto executives, including Kraken founder Jesse Powell, condemned Canada’s freeze of digital assets.