The Ontario Securities Commission has contacted law enforcement agencies after tweets from the chief executives of two of the world’s most prominent cryptocurrency-trading platforms appeared to offer advice on how crypto users could evade emergency restrictions on funding for the protests roiling the country.

Kristen Rose, the OSC’s manager of public affairs, said the regulator is “aware” of posts earlier this week from the Twitter accounts of Kraken CEO Jesse Powell and Coinbase CEO Brian Armstrong, which criticized the invocation of the Emergencies Act and advocated for the importance of non-custodial crypto wallets, with Armstrong promoting his own company’s such product. Non-custodial wallets are controlled directly by an individual rather than by a third party such as a cryptocurrency-trading platform, making it more difficult for law enforcement to freeze or seize the funds they hold.

“We are aware of this information and have shared it with the RCMP and relevant federal authorities,” Rose said in an email.

Powell has also tweeted about his Feb. 6 donation of just over one bitcoin, currently worth about $51,000, to HonkHonk Hodl, the crypto fundraiser in support of the convoy protests against the government’s COVID-19 response, which have snarled cities across Canada for weeks.

The emergency orders announced Monday require a broad range of financial players, including cryptocurrency-trading platforms, to continuously monitor for any activity related to “designated persons” and report it to law enforcement and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) if they find it. The definition of “designated persons” includes those who “use, collect, provide, make available, or invite a person to provide” property in support of the protesters.

The RCMP has sent a list of cryptocurrency addresses associated with the convoy protests to crypto-trading platforms, asking them to freeze and report any transactions related to them.

Cryptocurrency businesses have been required to register with FINTRAC since June 2020. The emergency orders broadened the registration requirement to include crowdfunding platforms that accept both virtual and government-issued currencies, a change the government intends to make permanent.

“The financial system has changed. The financial system now includes crowdfunding platforms and crypto,” said Deputy Prime Minister and Finance Minister Chrystia Freeland at a press conference Friday. “We need to modernize the powers of FINTRAC to include these digital-economy platforms.”

Kraken did not respond to a request for comment, but on Thursday evening, after The Logic contacted the company, Powell tweeted that Kraken will be “forced to comply” with requests from law enforcement to freeze customer assets. “We cannot protect you. Get your coins/cash out,” he said.

Ian Plunkett, Coinbase’s director of global policy communications, directed The Logic to a blog post that Armstrong published prior to the invocation of the emergency orders. The post states that Coinbase believes “companies should put appropriate controls in place to prevent censorship or unjust account closures from taking place,” but will comply with the law where required.

Matthew Burgoyne, head of the cryptocurrency and blockchain group at McLeod Law in Calgary, said Armstrong’s and Powell’s tweets about the importance of non-custodial wallets in the context of the emergency orders probably don’t rise to the level of making them designated persons. The fact that Powell made the donation to the convoy fundraiser before the order was in place is likely a defence against Kraken being required to consider him a designated person, which would mean it would have to close his accounts and report all his transactions to Canadian authorities, Burgoyne said.

“It’s not that they’re breaking the law by making these statements, but it optically doesn’t look great,” Burgoyne said. “There is a possibility that FINTRAC could more closely monitor these exchanges as a result of those comments. It could be attracting some undue attention.”

FINTRAC, CSIS and the RCMP all declined to say whether Kraken and Coinbase had made any reports to them in compliance with the emergency orders, or whether they had received any additional intelligence related to the two CEOs’ tweets.

The OSC’s confirmation that it is bringing attention to the CEOs’ statements comes in the context of the regulator’s ongoing efforts to get cryptocurrency-trading platforms operating in Canada to register as investment dealers. Most large foreign platforms have now placed restrictions on Canadian users as a result.

Kraken has restricted Ontario users from futures trading and all Canadian users from certain trading activities and tokens. The company has not confirmed whether it has applied for registration with Canadian securities regulators.

Coinbase, meanwhile, does not have any restrictions on Canadian users and markets itself as “the most trusted place for crypto in Canada.” It has incorporated in Canada and has previously confirmed to The Logic that it is in talks with Canadian securities regulators.

Both Kraken and Coinbase are registered with FINTRAC as money-services businesses dealing in virtual currencies, registrations that were in place long before the emergency orders.

Burgoyne said the two CEOs’ comments aren’t directly related to their eligibility to register with Canadian securities regulators, but they probably don’t help. He said the firms should be more concerned about attention from other Canadian agencies.

“If they’re not complying, and they’re not filing the suspicious transaction reports, there’s going to be monetary penalties and sanctions. There could be criminal charges,” he said. “I think it’s reasonable to assume that there might be an example made out of one of these exchanges.”

With files from David Reevely in Ottawa