Crypto assets are not a safe haven for one’s investments or a shield against government tyranny. In his whitepaper Bitcoin, Currencies, and Fragility, Nassim Taleb writes of the "safe haven from tyranny" thesis:
By its very nature, bitcoin is open for all to see. The belief in one’s ability to hide one’s assets from the government with a public blockchain easily triangularizable at endpoints, and not just read by the FBI but also by people in their living rooms, requires a certain lack of financial seasoning and statistical understanding — perhaps even a lack of minimal common sense. For instance a Wolfram Research specialist was able to statistically detect and triangularize "anonymous" ransom payments made by Colonial Pipeline on May 8 in 2021 — and it did not take long for the FBI to restore the funds. We can safely assume that government structures and computational power will remain stronger than those of distributed operators who, while distrusting one another, can fall prey to simple hoaxes
[..] The slogan "Escape government tyranny hence bitcoin" is similar to advertisements in the 1960s extolling the health benefits of cigarettes.
The massive power asymmetries of authoritarian regimes and their control over both traditional payment rails and domestic implies that dissidents attempting to use crypto assets to circumvent repression or capital controls will find it very difficult to move assets or cash out. Without the capacity to cash out, the efficacy of their actions is fundamentally limited to external geographic regions outside of the authoritarian regimes. Since no action can be effected internal to the regime this refutes the argument that crypto assets are an effective tool for dissidents.
This is best evidenced by the Canadian convoys in 2022 which attempted to take international donations in crypto assets and found themselves and their accounts frozen by both banks and Canadian crypto exchanges which blocked transactions under illicit financing laws. This made using the donations to purchase supplies impossible and undermined the crypto assets narrative.
The complete ban of crypto assets by the People's Republic of China also does not lend credibility to the thesis that crypto assets are outside the remit of authoritarian controls and their restriction on capital movement and controls over domestic money services business.
- Bogost, Ian. 2017. ‘Cryptocurrency Might Be a Path to Authoritarianism’. The Atlantic 30.
- Taleb, Nassim Nicholas. 2021. ‘Bitcoin, Currencies, and Fragility’. ArXiv:2106.14204 [Physics, q-Fin], July. http://arxiv.org/abs/2106.14204.
- White, Molly. 2022. ‘Cryptocurrency Off-Ramps, and the Shift towards Centralization’. Molly White. 12 February 2022. https://blog.mollywhite.net/off-ramps/.
- Krugman, Paul. 2022. ‘The Strange Alliance of Crypto and MAGA Believers’. The New York Times, 11 January 2022, sec. Opinion. https://www.nytimes.com/2022/01/10/opinion/crypto-cryptocurrency-money-conspiracy.html.
- Xie, Rain. 2019. ‘Why China Had to Ban Cryptocurrency but the U.S. Did Not: A Comparative Analysis of Regulations on Crypto-Markets between the U.S. and China’. Wash. U. Global Stud. L. Rev. 18 (2): 457–89. https://openscholarship.wustl.edu/cgi/viewcontent.cgi?article=1684&context=law_globalstudies.
- Wang, Gangjin, Yanping Tang, Chi Xie, and Shou Chen. 2019. ‘Is Bitcoin a Safe Haven or a Hedging Asset? Evidence from China’. Journal of Management Science and Engineering 4 (3): 173–88. https://doi.org/10.1016/j.jmse.2019.09.001.
- Ottenhof, Luke. 2021. ‘Crypto-Colonialists Use the Most Vulnerable People in the World as Guinea Pigs’. VICE Media.