Ontario Securities Commission has flagged tweets from two top crypto exchanges. The CEOs of Coinbase and Kraken took to Twitter to condemn Canada’s Emergencies Act when it was triggered last week. Canada can use the Emergencies Act to blacklist crypto addresses linked to the Freedom Convoy protests.
According to The Logic, the Ontario Securities Commission has reported tweets from two cryptocurrency exchange leaders. On February 14, Canada invoked the Emergencies Act in an attempt to manage the Freedom Convoy, which was occupying Ottawa’s downtown core in protest of COVID-19 restrictions.
The government was able to freeze certain bank accounts and prevent exchanges from operating with particular bitcoin addresses as a result of these limitations. Last week, over 34 bitcoin addresses were blocked.
Two cryptocurrency exchange CEOs slammed the Emergencies Act shortly after it went into force.
It’s “concerning to see anything like this happening in any country, especially such an economically open place like Canada,” according to Brian Armstrong, CEO, and co-founder of Coinbase.
Meanwhile, Kraken CEO Jesse Powell tweeted: “Do you see where this is going?…
I’m sure freeze orders are coming” and said elsewhere that his exchange “will [100%] be forced to comply” with police orders. Powell previously donated 1 BTC to the Freedom Convoy movement, an amount worth $37,400 at current market prices.
Both CEOs recommended storing cryptocurrency in custodial exchange wallets. Rather, they encouraged consumers to keep their money in a non-custodial off-exchange wallet and send money from there.
While regulators can put non-custodial wallets on a blacklist to prohibit them from moving cash through exchanges, they can’t stop them from moving cryptocurrencies on-chain.
The Ontario Securities Commission, Ontario’s securities regulator, has reportedly reported the aforementioned tweets to law enforcement, specifically the Royal Canadian Mounted Police.
On Feb. 21, OSC manager of public affairs Kristen Rose told The Logic, “We are aware of this material and have shared it with the RCMP and relevant federal authorities.”
Powell and Armstrong’s tweets, according to experts, are unlikely to be considered criminal or cause either of them to be classified as a designated person under the Emergencies Act.
Despite this, the tweets clearly instruct investors on how to circumvent rules. According to one analyst, the tweets are bad optics, and the messages contained within may compel Canadian regulators to “closely monitor these exchanges” and attract “undue scrutiny.”
Kraken and Coinbase are both registered with FINTRAC, Canada’s financial intelligence agency, and offer services in the country. Though bitcoin exchanges were required to report to FINTRAC before the Emergencies Act was enacted, the act’s enactment now requires crowdfunding sites (and the payment providers utilized by crowdfunding platforms) to do so as well.
Despite these increased compliance efforts, it’s unclear how closely Kraken, Coinbase, and other crypto exchanges are cooperating with Canadian authorities in terms of enforcement.
Also read: California To Allow Bitcoin Payments for Govt Services
