Canada’s national security committee grills crowdfunders and payment processors over Freedom Convoy fundraisers

Crowdfunding platforms GoFundMe and GiveSendGo, as well as payment processors Stripe and PayPal, faced tough questions from Canadian politicians on March 3 about the role their companies played in facilitating Canada’s recent Freedom Convoy movement. 

Convoy organizers hosted a fundraiser on GoFundMe that raised $10 million from Jan. 14 until Feb. 4, when the platform shut it down following reports of illegal activity by participants. Undeterred, organizers moved to another platform, GiveSendGo, that raised $9.7 million U.S as of March 3, although proceeds have since been frozen.

During a tense two-hour long meeting of the Standing Committee on Public Safety and National Security, several politicians asked executives why they’d still failed to cut off the Convoy’s fundraising campaigns long after mainstream news reports began circulating of the hateful rhetoric of its organizers – especially ties to anti-Muslim and white nationalist movements.

Most of the executives insisted their companies monitored suspicious transactions on their platforms, screened donors, and were willing to remove or block illegal activity. “We do extensive analysis on the activities that are happening on our platform,” said GoFundMe president Juan Benitez, in response to questioning. “It’s our goal to be the most trusted platform in social fundraising. We believe that we screen above and beyond what the regulatory climate requires of us.”

Deputy Prime Minister Chrystia Freeland has previously said the Canadian government plans on passing legislation to ensure crowdfunding platforms cannot be used to fund hate or extremist movements. Currently, crowdfunding platforms and payment processors are not regulated by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), the national financial intelligence agency, nor are they subject to the same legal reporting requirements as banks. 

The March 3 meeting marked the opening of a study by the Committee into the ways crowdfunding platforms may be financing extremist groups, including the Freedom Convoy and its associated spinoff movements. Testimony by GoFundMe, GiveSendGo, Stripe, and PayPal executives suggests that any future legislation by the Canadian government will need to address some significant gaps if it hopes to crack down on bad actors while also allowing crowdfunding platforms to support peaceful, legal fundraising campaigns.

Due diligence in an age of misinformation

GoFundMe, Stripe, PayPal, and GiveSendGo all have clear terms of service that prohibit hatred or illegal activities, as well as teams of employees responsible for enforcement and due diligence. However, Liberal MP Taleed Noormohamed said evidence of the Convoy’s connections to anti-Muslim causes was clear in mainstream news outlets days after its debut on GoFundMe.

“When the fundraiser was created on January 14, it complied with our terms of service,” Benitez replied. “There was nothing in the diligence we did on the campaign organizer that suggested that there were any issues.” In fact, he added, it was the sheer number of donations to it that caught GoFundMe’s attention, not the organizer’s beliefs. Only after speaking with Ottawa Mayor Jim Watson and seeing reports of violence from local police did GoFundMe decide to cancel the fundraiser altogether.

GoFundMe took a lot of public criticism for not acting sooner. But Benitez also suggested that GoFundMe doesn’t consider the past public statements of fundraising organizers when doing due diligence. “It is not necessarily within our purview of everything that anyone would have ever commented on in their lives,” he told the committee.

Meanwhile, GiveSendGo said it had a screening process for fundraisers, but didn’t seem to take the possibility of extremist involvement on their platform seriously. During one of the most heated exchanges of the meeting, Liberal MP Pam Damoff asked GiveSendGo co-founder Jacob Wells whether he would allow the Klu Klux Klan to start a fundraiser on his platform. Wells said any group looking to fundraise on GiveSendGo would need to pass the platform’s due diligence processes (known as “know your customer” or KYC in the financial industry).

“If they pass all of those measures and what they’re fundraising for is legal, then yes, we will allow them to fundraise,” Wells said.

Cracking down on illegal, peaceful movements

Buried within the terms of service on GoFundMe and GiveSendGo are provisions against the use of either platform for illegal activities. Both Stripe and PayPal also told the committee they monitor suspicious activity on their services and, if necessary, report it to law enforcement.

Participants in the Freedom Convoy and its associated spinoffs allegedly committed a wide variety of crimes over the course of its three-week occupation – parking illegally in downtown Ottawa, blocking a border crossing in southern Alberta, damaging property, possessing illegal rifles, and — notably — plotting to kill RCMP officers. All of these acts are against the terms of service of all four companies that testified before the Committee.

But as Conservative MP Tako van Popta asked GoFundMe, what about peaceful protests that are nonetheless illegal? “If there were a GoFundMe campaign to support people protesting the harvesting of old-growth forests – even if that was against a court injunction,” van Popta said, “or if there were a protest against pipeline development even if it was against the law or, in this case, a peaceful protest that did not comply with City of Ottawa parking rules – what’s the distinction between lawful and peaceful?”

Benitez said unlawful activity is prohibited by GoFundMe’s terms of service. “When we become aware that an activity on our platform is in violation of law, that is a violation of our terms of service, and we will remove it from our terms of service,” he said.

Crowdfunding platforms appear to have a consistency issue when it comes enforcing their own terms of service. In fact, organizers trying to prevent the logging of ancient rainforests in Fairy Creek, B.C. launched a GoFundMe fundraiser in October 2020 called ‘Direct Action for the last Ancient Rainforests’ that remained active for 13 months – even after a temporary court injunctions banned protests in the area. (According to its last update, in November 2021, the organizers shut down their own fundraiser because “industry constantly interferes and bullies GoFundMe to shut down this campaign”.)

When asked about the fact the Freedom Convoy was in violation of local laws from the very moment it launched its crowdfunding campaign, GoFundMe general counsel Kim Wilford simply reiterated that when GoFundMe reviewed the fundraiser’s content, it “passed all of our checks.”

Regulating beyond Canada’s borders

Jurisdiction is perhaps one of the biggest issues the Canadian government will face in trying to regulate crowdfunding platforms and payment processors even further. All four companies that appeared before the Committee on March 3 are based outside of Canada. Katherine Carroll, global head of public policy at Stripe, said her company opened its first office in Toronto the week of the committee meeting.

Multinational companies deal with foreign regulators all the time, especially in the world of finance. “Over the last few weeks, as events unfolded in Ottawa and elsewhere in Canada, hundreds of our employees have worked closely with our financial institution partners to monitor activity, share information, and comply promptly with court orders and other emergency measures,” Carroll told the Committee.

Regulating crowdfunding platforms without a presence in Canada, however, can be difficult – especially if the platform in question refuses to comply. After GoFundMe suspended its fundraiser for the Freedom Convoy, Boston-based Christian fundraising platform GiveSendGo picked up the slack. (Their fundraising campaign for the Freedom Convoy is still active as of March 3, although the page warns that donations cannot currently be disbursed.)

When the Ontario government obtained an order from the Superior Court of Justice in February 2020 to freeze access to funds collected by the GiveSendGo fundraiser – millions of dollars worth at that point – the crowdfunding platform angrily rebuked it. “Canada has absolutely ZERO jurisdiction over how we manage our funds here at GiveSendGo,” read a statement posted to Twitter the day the order was issued.

During questioning by the Committee, GiveSendGo cofounders Jacob Wells and Heather Wilson both said it was important for them to follow Canadian laws. When pushed, however, Wells took issue with describing the Freedom Convoy as an occupation and said the freedoms of Western society come at a very high price. “For us to just trample on people’s freedoms because it’s uncomfortable to some people – that’s very uncomfortable for us to do,” he told the Committee.

GiveSendGo also appeared to lack an understanding of Canadian anti-terror law. Liberal MP Sameer Zuberi pointed to a Guardian investigation showing that GiveSendGo had been supporting fundraising efforts for the Proud Boys, a violent racist and chauvinist gang listed as a terror organization in Canada since 2019.

“Are you aware that the Proud Boys is a terror group in Canada?” he asked. “At this time, we are,” Wilson said.

“When were you aware that the Proud Boys are a terrorist organization?” Zuberi asked – to Wilson’s apparent confusion. “When did you label them as a terrorist organization?” she replied. “I’m not sure.”

Wilson went on to confirm that GiveSendGo had supported $375,000 in fundraising for at least 11 members of the Proud Boys.

Ensuring organizations operating in Canada understand their regulatory environment is a challenge for any sector, not just crowdfunding – but the Committee’s inquiries seem to suggest that it may be difficult for Canada to crack down on illicit activity by platforms outside of its borders.

Drafting Canada’s new anti-terror crowdfunding legislation

The Standing Committee meeting on March 3 represents the first of many meetings on the issue of crowdfunding and violent extremism. Once the Committee concludes its hearings, it’ll file a report that will likely inform whatever the Canadian government decides to do when it sits down to write the country’s new crowdfunding regulations.

As Freeland explained on Feb. 14 when the Emergencies Act was first announced: “The illegal blockades have highlighted the fact that crowdfunding platforms and some of the payment service providers they use are not fully captured under the Proceeds of Crime and Terrorist Financing Act.”

Whatever it decides, the Canadian government seems committed to ensuring that a large-scale campaign of civil disobedience and violence by movements like the Freedom Convoy cannot happen again.

How exactly this legislation plays out, and its implications for social movements and the sector at large, remains to be seen.

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