Finance Committee on March 14th, 2022

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Further to that, we have heard those representing different companies here today talk about the lists they have received and how they may utilize those lists for other purposes, including the anti-money laundering/terrorist financing regimes they have in place.

Does it concern you that these companies are retaining these lists?

[National Chief RoseAnne Archibald]

Yes. What concerns me, I think, more is who determines who gets on these lists? I just want to reiterate that first nations are not terrorists. This is our country. These are our lands. These are our waters. We have citizens who want to protect those Creator-given rights.

We should not be on any lists, but I am concerned that those lists do exist, yes.

Thank you, Mr. Albas.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

That's great. Thank you, Chief. I appreciate your answers today and your presence.

I think I have run out of time. Maybe I will get another round, Mr. Chair.

I will pass my time over to MP Lawrence so that he can continue his questions.

[The Chair, Liberal, Peter Fonseca]

MP Lawrence.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you very much.

I will be going back to Mr. Wiley and Mr. Walper.

To return to my previous line of questioning, what was the impact within your organizations of the amount of cryptocurrency that was frozen as a result of the Emergencies Act? If you can't comment specifically, maybe generally will be fine.

[Blair Wiley]

I would say two things. One, no cryptocurrency was frozen. We did, however, respond to the lists of Bitcoin addresses that had been associated with fundraisers and did block some transactions that were directed to go to those addresses. The actual quantum of amounts blocked I don't have. I would have to follow up with a written response.

[Dustin Walper]

It was a similar situation for us. We did block a small number of transactions after we received that information, but I couldn't tell you involving exactly how much. It wasn't a particularly large amount.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you.

At least from the anecdotal evidence of what you have seen, cryptocurrency did not play a major role in funding or fomenting the illegal protest or blockades. Would that be a fair comment?

[Blair Wiley]

It would be a fair comment from our perspective. Within our client base, we did not see any significant volume of attempts to fund a transaction for the convoy.

[Dustin Walper]

That's right, and similarly for us, we didn't see anything of significance. I can't speak more broadly, but through our platform, we didn't see very much.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Mr. Wiley, I want to pick up on a comment you had with respect to “designated persons”. I read the definition of “designated person” as an “individual or entity...engaged, directly or indirectly” in any activity. In the regulations, this goes into three different areas, which include being part of a protest that disrupts the flow of goods. It's extremely, extremely broad.

Mr. Wiley, does that concern you? Does it make your job harder to identify people to the authorities?

[Blair Wiley]

I think the initial order and the breadth of that definition you've alluded to did present challenges for companies like Wealthsimple.

We have a very highly skilled team of AML professionals and lawyers and are fortunate to work with many very experienced colleagues, but all of us were working very hard and calling everyone we knew—peers in the industry—to try to understand how people were interpreting and applying those definitions, both to be able to be responsive to government policy and the law and to also not cast too wide a net. It was a very difficult and stressful period when the order first came down with such a broad definition.

[The Chair, Liberal, Peter Fonseca]

Thank you.

That's your time, MP Lawrence.

We are moving to the Liberals and MP Dzerowicz for five minutes.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you, Mr. Chair.

I want to thank all the presenters today. It's a very interesting and important conversation.

My first question is for Mr. Wiley, but if Mr. Mosoff or Mr. Walper want to respond, I'm open to that as well.

If you look at the objective, it was very, very clearly stated when we launched the Emergencies Act. The objective was following the money and stopping the illegal blockades and the occupation. In particular, the measures introduced as part of the emergency economic measures order were very much catered to do that.

You had talked about and answered in response to Mr. Lawrence's question, and it seems that from what you indicated, there was a change in behaviour from the enactment of this act: It seemed to block some funding from actually happening.

Can you maybe elaborate a bit more on that? That's just because, again, what we're looking at is that we've enacted this: We wanted to follow the money and stop the illegal blockades. That was our key objective, and we did our very best in a short period of time to try to put a few measures in place to do that. It seems like you've indicated that we were successful in actually stopping some actions. Could you elaborate a bit more on that?

[Blair Wiley]

Sure.

I think it's helpful to distinguish the freezing of accounts from the blocking of money movement and crypto movement to fund the activities. We did find it generally more straightforward to identify Bitcoin addresses that were associated with fundraisers and to block transactions to those addresses.

I think we focused our efforts, frankly, on that dimension of the emergency order, which was more with respect to money moving to fundraisers, rather than trying to focus specifically on particular individuals, given the breadth of that definition.

[Julie Dzerowicz, Liberal, Davenport, ON]

Okay. A layperson in general I think doesn't quite get Bitcoin yet, or cryptocurrency—

[Blair Wiley]

Sure—

[Julie Dzerowicz, Liberal, Davenport, ON]

—and I might be speaking out of turn. Maybe people know more than I do, but I'm trying to follow the line, just for the average person who might be listening. Often, people are used to fundraisers. Money goes into some bank account, like a PayPal, and then there's some way to distribute the dollars.

[Blair Wiley]

That's right.

[Julie Dzerowicz, Liberal, Davenport, ON]

How is it different from a Bitcoin or cryptocurrency perspective if it's raising money? How would fundraisers—people who might be organizing for the blockade—be able to actually grab those dollars?

[Blair Wiley]

Sure. I will probably defer here to both Brian and Dustin, who I think have more technical expertise than I do.

My personal view is that there's not that much of a difference from a platform like ours. It's just like how someone might decide to use their credit card to process transactions on a GoFundMe or GiveSendGo platform. If they want to send Bitcoin to a particular destination—a wallet on the Bitcoin blockchain—they have to key in the address for that Bitcoin wallet. If it's a wallet address that has been identified as being associated with criminal activity or alleged criminal activity, we have the ability to stop that transaction from occurring through our centralized facilities.

I would defer to Dustin and Brian if they'd like to add to that response.

[Brian Mosoff]

I would add—

[Dustin Walper]

Yes. That's a fair point.

Go ahead. I'm sorry.

[Brian Mosoff]

I was going to add that the centralized platform that the other two individuals operate is able to freeze those activities, whether it's through a direct withdrawal from their platform to an identified address.... It's also possible that an individual can withdraw to a self-hosted wallet that is outside the purview of that specific platform and make a direct donation. Should one want to use a self-hosted wallet, there wouldn't be any way for a centralized platform to freeze those funds.

What you would need to do at that point is use one of these blockchain surveillance tools to monitor the activity to see where those funds go and when they take place. When they cash out at some point, whether it's in the short term or the long term, you would be able to identify the interaction of those addresses and tie it back to a specific individual.

There are two ways the assets can be used: through a centralized platform and through the self-hosted wallets. It's important, as we come up with frameworks, to understand that the technology is going to be used in both ways.

[Julie Dzerowicz, Liberal, Davenport, ON]

In your opinion, Mr. Mosoff, did the emergency economic measures order cover both the wallet and the other mechanism, or did you feel that it didn't quite cover the ability to track in both pockets?