Lessons from Canada: Your Money Is Not Yours. You Merely Have Access To It Until…

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Over a period of decades, we have grown to believe that it’s best to trust the financial intermediaries with our hard-earned. And it indeed made sense for a long time given the risks associated with stashing the cash in your home or somewhere else. 

But now money is digital, and we need to ask some really hard questions like: 

Is the money that I earned legally truly mine? Or someone else has the power to press the financial kill switch?

Why should I trust centralized banks and exchanges where the government, not me, is in full control over my money? 

Truth be told, your money in the bank or crypto exchanges is not really yours. If the powers that be think you’re not behaving the way they want you to behave, they could nuke your accounts. 

Think about it. Not even Hitler had the power to cut off financially those who disagreed with them. But thanks to KYC, centralized exchanges, and increased oversight by governments, the authorities today can hit the kill switch on anyone they want.

It’s much easier today than a decade ago when money moved in a suitcase full of dollars.

Punishing the (innocent) people

Canada’s COVID-19 vaccine mandates require the truckers crossing the US-Canada border to be fully vaccinated. Else, they have to spend two weeks in home quarantine.

Last month, the “Freedom Convoy” protestors clogged the streets of Ottawa to stand against the regulation.

Frustrated at the situation, Canadian Prime Minister Justin Trudeau invoked the Emergencies Act for the first time in history, granting the police unprecedented powers to end the protests.

However, the financial surveillance imposed by the government backfired as it targeted innocent civilians. 

According to TCN News, “police harassed a small business for being open in the red zone and a journalist had her bank accounts frozen for the crime of telling the truth.”

Canada got GoFundMe to block millions of dollars in donations to the Freedom Convoy. The protesters and their supporters turned to Bitcoin, raising as much as 21 BTC by February 15. Kraken CEO Jesse Powell had also pledged one BTC for the cause.

Then the authorities came after the crypto donations. An Ontario Superior Court judge signed a Mareva Injunction to restrict the Freedom Convoy leaders and fundraisers from “selling, removing, dissipating, alienating, transferring, assigning” approximately $20 million in assets raised around the world.

They froze crypto assets in more than a hundred wallet addresses associated with Bitcoin, Ethereum, Cardano, Monero, Litecoin, and others. 

Meanwhile, the Royal Canadian Mounted Police had also ordered crypto exchanges to freeze 34 crypto addresses.

The Canadian government was cutting off its citizens’ ability to access their own, legally-earned money. You might expect this to happen in a third-world dictatorial regime.

But it happened in Canada, which claims to be a thriving democracy with high moral standards. 

Governments cannot freeze cryptocurrencies like Bitcoin and Ethereum directly within the network. But they can identify specific wallet addresses and ask centralized crypto exchanges and payment processors to freeze the funds.

Crypto wallets may not have personally identifiable information, but wallets hosted on a centralized exchange are linked to an identifiable user account.

Whether you agree or disagree with the trucker’s views on the COVID-19 policy is irrelevant. The point is, should the government have control over your money? Especially when the authorities themselves didn’t follow a fair legal process in declaring your activities illegal or criminal?

Non-custodial, decentralized solutions

Canada made people realize the value of self-custody and decentralized crypto platforms. Ethereum founder Vitalik Buterin told CoinDesk at the ETH Denver conference,

“If the truckers are blocking the roads and that’s breaking the economy, fine, blocking the roads is illegal and there are laws against that.”

He added, “If the government is not willing to follow the laws … [and] give people a chance to defend themselves…and they just want to talk to the banks and basically cut out people’s financial livelihoods without due process, that is an example of the sort of thing that decentralized technology is there to make more difficult.”

If you’re worried about your funds being frozen, keep your coins away from centralized exchanges. Stablecoins and wrapped tokens such as USDT, USDC, and wrapped BTC are also at risk because they have centralized control of freeze functionality.

However, truly decentralized and uncensorable platforms like Portal offer unstoppable, anonymous, and zero-knowledge crypto transactions.

Portal is a true cross-chain DEX that facilitates the private, off-chain execution of “smart contracts” for asset issuance, swaps, staking, liquidity, derivatives, and more, all peer-to-peer, without third-party custody or control.

Kraken’s CEO Jesse Powell said on Twitter, “If you’re worried about it, don’t keep your funds with any centralized/regulated custodian. We cannot protect you,”. 

Closing thoughts

It might be difficult for most people to wrap their heads around the fact that banks and centralized crypto exchanges merely give you access to your own funds.

You feel like you have full control over your legal, hard-earned money. But you don’t. The people in power can bend the rules and they can seize or freeze your funds anytime.

It’s irrelevant whether they followed due process. 

If you want to truly own your money, decentralized and non-custodial platforms are the only solution. It’s wise to have at least some, if not all, of your money in places where you are in control.