Most of the roughly $1 million in known donations raised in digital currency for the Freedom Convoy appears to have evaded seizure by authorities more than a month after the federal government invoked the Emergencies Act to freeze convoy assets, according to a CBC News investigation.
The main account associated with protesters raised 20.7 bitcoin (around $1,062,674 Cdn) but as of March 18, police seem to have frozen only 5.96405398 bitcoin (around $306,176.)
The majority of the remaining 70 per cent of digital currency assets has been drained from its original source, with one main self-professed crypto organizer posting videos of himself handing access information directly to convoy supporters in downtown Ottawa.
Following court documents and bitcoin movements online, CBC News pieced together a partial but elaborate web of transactions in which large sums were dispersed into hundreds of virtual wallets.
A joint force operation involving the Ottawa Police Service (OPS), Ontario Provincial Police (OPP) and RCMP is seeking to recover bitcoin used by anti-COVID-19 health mandate protesters, but observers say those efforts have so far failed to stop users from finding ways to access the money.
"There's a huge limitation, as we've seen, with freeze orders when they relate to cryptocurrency wallets," said Mathew Burgoyne, a leading Canadian digital currency lawyer based in Calgary.
"The limitation is that the crypto can simply be transferred to another wallet address that's not frozen, and then another address that's not frozen, and it can continue to be transferred in an effort to obscure the original source, or in an effort to remove the funds as much as possible from the wallet that was frozen."
The so-called "Freedom Convoy" occupied the streets of downtown Ottawa for over three weeks in February to demonstrate against COVID-19 mandates and restrictions, including a vaccine mandate for truckers to cross the Canada-U.S. border. Protesters also set up blockades at several border crossings across Canada.
The Emergencies Act was invoked on Feb. 14, which singled out digital assets as one way the legislation's broad powers would be used to stop protesters from raising funds.
The RCMP blacklisted crypto wallets associated with the convoy and demanded Canadian digital currency exchanges stop facilitating transactions.
RCMP declined to confirm or deny any ongoing operation related to this story, but CBC News has confirmed the force targeted 34 crypto wallets.
In its successful filing of a rarely-used civil injunction granted Feb. 17, lawyers representing Ottawa residents in a class-action lawsuit against convoy organizers listed more than 100 crypto wallets allegedly associated with the protesters. The civil suit is seeking to recover assets, including digital currency, raised by protesters and move them into an escrow account to be used as a means of paying damages resulting from the class action.
At least 20 of the wallets listed in the civil claim were included on the RCMP's list, including the primary account used by the protesters to raise digital currency.
Following the money
Because bitcoin is distributed on a publicly accessible digital ledger, known as a blockchain, some specific data about the movement of assets can be found.
According to blockchain research completed by CBC News, hundreds of thousands of dollars worth of bitcoin associated with the protesters continued to move following the freeze orders.
In one example analyzed by CBC News, a wallet containing three bitcoins (roughly $154,010) was emptied within days, moved to an unflagged account. The same account received almost 15 bitcoin on Feb. 16 and that total was then disseminated across other accounts in $200 increments (.004 bitcoin).
Court documents show examples of other similar patterns.
Monique Jilsen, a lawyer with Lenczner Slaght who is involved in the civil case against the protest organizers, said as digital currency moves from wallet to wallet, it gets harder to track but remains traceable.
"I presume, although I don't know, in part that was done in order to distribute the wallets … they've taken one big wallet, moved it into hundreds of smaller wallets, and then they hand the passwords to that smaller wallet to the ultimate recipient," she said.
Though the RCMP won't comment on this case, it issued a statement to CBC News saying it has the capability to seize and recover digital currency assets, pointing to past cases where the Crown successfully prosecuted crypto criminals.
"As part of its capabilities and plans to tackle crypto crime and track crime-related transactions, the RCMP generally uses a variety of police procedures, as well as collaborating with applicable law enforcement partners," the RCMP statement read.
One of the main convoy organizers named in the Mareva injunction documented his own efforts to distribute bitcoin – sometimes in-person – to convoy supporters.
Nicholas St. Louis, who has not been charged in this case, handed out envelopes with what he said were passwords, or "seed words" directly to protesters in a series of videos posted online on Feb. 18.
The Ottawa resident ran a popular social media channel about bitcoin, and was a self-described "liaison between the bitcoin community and directors of the Freedom Convoy nonprofit organization."
In a Feb. 13 video posted to his YouTube channel, St. Louis told viewers organizers had reached their "ambitious goal of 21 bitcoin" and that while donations would still be accepted, they were "now focusing on securing and distributing the funds."
When the Emergencies Act was invoked the next day, the website hosting the main digital currency fundraiser was removed and it was announced St. Louis would be "overseeing things moving forward" alongside another person.
St. Louis announced on his social media he would be giving bitcoin to "law-abiding citizens."
"To mitigate choke points, we will immediately begin decentralizing the bitcoin and getting it to truckers," he wrote.
Over the following 24 hours, he documented his plan online.
Handing out bitcoin to protesters
In videos shared on social media, he approached drivers at the Ottawa protest before handing them a wallet containing what he said was information needed to access the pot of bitcoin, at times touting the money as "untraceable."
In another video captured on a protester's live feed, he told one of the truckers the envelope contained $8,000.
A step-by-step guide on how he distributed the funds directly to truckers was soon shared online.
St. Louis wrote on Feb. 18, "I'm not scared of a cowardly tyrant, I will be peaceful in all situations, I acted with love, integrity, honour and respect. If I'm punished for doing the right thing, I gladly accept that fate."
He declined to be interviewed by CBC News, writing, "Based on advice from my lawyer, I'm unavailable to speak on any matters regarding my involvement with the convoy at the moment. Sorry."
In a March 9 sworn affidavit filed in relation to the civil action, St. Louis said that on Feb. 28 police officers executed a search warrant on his home and seized roughly $250,400 worth of bitcoin.
Ottawa Police and the OPP both redirected CBC News inquiries about the case to the RCMP.
Credit belongs to : www.cbc.ca