Canadian protestors blocked downtown Ottawa from anti-vax truckers. Their fund-raising platform was shut down by their host because they fear the “promotional violence.” They then move to a Bitcoin crowdsourcing funding site. It raised $900,000.
Russian troops occupy Ukraine’s borders. According to Elliptic, a blockchain analytics company, Ukrainian NGOs and volunteer organizations embrace cryptocurrency to defend their country in case of war.
Recent reports like these raise the question: Are Bitcoin and other cryptos becoming the preferred fundraising platform for political protesters and social movements — given that cryptocurrencies don’t respect national boundaries and are relatively censorship-resistant? Should one be concerned if this is the case?
It is a problem for some that the same platform that allows freedom fighters to raise funds can also fund racist or terrorist groups. According to the New York Times, the majority of Canadian citizens did not support the truckers’ blocking of downtown Ottawa. Is Bitcoin being used to undermine democratic processes if true?
Elliptic stated that “Cryptocurrency is proving to be a strong and growing alternative to traditional currency — especially when it involves donations from other countries.” Bitcoin donations to Ukrainian volunteer organizations to purchase military equipment, training services, and medical supplies for possible war exceeded $500,000 in 2021. This is a tenfold increase over the previous year.
OpenNode, a Bitcoin payment processor, wrote last year that Bitcoin’s censorship resistance is one of its greatest advantages. Bitcoin is the preferred currency for many people and organizations that have been excluded from traditional payment methods. There’s no central authority to decide who can and cannot use it.
Pandora’s Box has been opened
Some believe that this trend will only continue. “Social movements will. Cointelegraph was told by Erica Pimentel (assistant professor at Queen’s University’s Smith School of Business), that blockchain-based crowdfunding platforms will eventually be used to raise funds. When campaigns can be easily closed down, there is no incentive to use central fundraising platforms such as GoFundMe. She stated that there is no way to close Pandora’s box.
Bitcoin has been used for fund-raising purposes since the beginning. The political movement of Alexei Navalny, a jailed Russian dissident, has been receiving BTC donations from 2016 to date. However, inflows increased significantly in 2021. According to the Bitcoin address, 667 BTC had been received by the movement as of February 16, 2022. This is more than $29 Million at the time of writing.
The Belarus Solidarity Foundation (BYSOL), a former Soviet republic, has been accepting crypto donations in support of political victims of its security forces after street protests following the disputed 2020 presidential election. Andrei Strizhak (head of BYSOL) stated that the foundation has used cryptocurrencies since the beginning to pay protestors’ fines. “It is very difficult for Belarusian authorities stop these flows.”
August 16, 2020, Protest against Lukashenko Minsk, Belarus. Translation: “Fair elections. Tribunal. Freedom for political prisoners.” Source: Homoatrox.
Many people cite the advantage of blockchain-based fundraising as a reason to bypass financial institutions. Elliptic said that in some cases financial institutions had closed the accounts of these fundraising campaigns.
This cannot be done with a crypto wallet. The convenience of cryptocurrency allows for cross-border donations and easier access to wealthy donors overseas.
Extremist groups also use Bitcoin to raise funds. Daily Stormer, a neoNazi group, received 15 Bitcoins from an anonymous donor in August 2017. This was just one week after it participated in a deadly white supremacist rally that took place in Charlotteville, Virginia. According to a PBS Frontline report that spoke with Beth Littrell (a lawyer at the Southern Poverty Law Center), Bitcoin was the main source of funding for the group after Daily Stormer was banned and removed from credit card companies. Littrell noted:
“It has become more difficult to use the legal system in order to eradicate hate groups because they now operate with virtual money and online networks. “We were able ‘.[…] to sue Ku Klux Klan as a terrorist organization. She said that it is difficult to do the same today. “The law is changing, but it’s not keeping up with the harm.
Alternative pressure points
Pimentel stated that “Officially, we can all agree we want the government in the way Neo-Nazi movement,” Cointelegraph. “However, there are ways to stop these types of movements raising money online via crypto-based platforms.
Pimentel noted that the Daily Stormer was removed from the internet by GoDaddy, its web hosting company. She also pointed out that TallyCoin is now hosted by GoDaddy, which is the Bitcoin crowdsourcing fund service used by the Ottawa truckers. She stated that there was the potential to pressure web hosting companies or search engines to cut off access to crypto fundraising platforms.
Police Charlottesville, VA, August 12, 2017: White supremacists clash against police Source: Evan Nestarak.
When Pimentel was asked if decentralized fund-raising is generally a good or bad thing, he said that it all depends on “whether or not we agree with the ideology” of the group or foundation. I think that we can all agree that these people should have access that is secure and inviolable.
However, she said that in the unlikely event that an organization uses Bitcoin for discrimination or hate, she hoped that the government would intervene.
“I worry that the blockchain-based crowdfunding system will be used by criminal groups, and it will become more difficult to stop them.”
Others believe that BTC and other cryptocurrency are just tools. It is up to those who use them for good or evil. Marta Belcher, a lawyer for civil liberties and cryptocurrency, explained that anonymity is the same.
“Just because a technology can be anonymously used does not necessarily mean it is wrong. We shouldn’t call for a ban on any technology just because it can be used in ways that we don’t like.
Belcher said, “We don’t blame Ford when one their cars is used in a bank burglary.”
Nonetheless, governments may insist on some oversight or regulation. Pimentel stated that the Canadian government recently announced an expansion to its Anti-Money Laundering & Terrorist Financing law, which will include payment service providers and crowdfunding platforms. “The deputy prime minister” also indicated that crypto transactions would be included in the measure.
The act requires that all payment service providers and crowdfunding platforms linked to them, including crypto-based ones, register with the Financial Transactions and Reports Analysis Centre of Canada. Pimentel stated that this means that platforms will need to report crypto transactions exceeding $10,000 Canadian dollars, or crypto transactions deemed suspicious.
This act is applicable to Canadian companies and international businesses that do business in Canada. It is possible that the act will discourage Canadian businesses from doing business.
It can be costly to follow all the legal processes. Pimentel is concerned that this could have the unintended result of increasing compliance costs for Canadian companies, and “pushing people who want to avoid reporting requirements to use firms overseas.”
Tonight in #Ottawa, the Freedom Convoy protest continues for the 19th day #FreedomConvoy pic.twitter.com/RFl0epGPvi
— Lisa Bennatan (@LisaBennatan) February 16, 2022
Is there any turning back?
Overall, given that Bitcoin and other cryptocurrencies are borderless and relatively censorship-resistant, is there any turning back the clock on this trend? Are there any chances that social movements will eventually raise funds through crowdfunding platforms that use blockchain technology? Pimentel stated:
“I believe that decentralized financing, which are hard for governments to interfere, will be the norm going forward.”
This will continue to cause controversy as it is difficult to distinguish the ends from the means (e.g. Bitcoin (BTC)). If history is any indication, it is unlikely that arguments over the legitimacy of a cause will be settled. A hostage-taker may still be a freedom fighter for another.
Eileen Wilson –Technology and Energy
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