Monday, March 7, 2022

Stripe and the Ottawa trucker convoy

Why did Stripe, a global payments giant, decide to help the Ottawa trucker convoy? That's what I was wondering as I watched the recent House of Commons committee into the crowdfunding of the convoy, which aired last week. (You can catch it here.) 

If you recall, the convoy raised $10 million or so via GoFundMe, a crowdfunding site, only to switch over to competitor GiveSendGo on February 5 when GoFundMe froze its campaign. (I wrote about convoy financing here and here.) The $9 million or so that was subsequently raised on GiveSendGo was to be disbursed to truckers to pay for fuel, food, and shelter. These funds are currently frozen thanks to an Ontario government restraint order and a private class action suit's Mareva injunction.

The committee's inquiry makes for interesting listening. Representatives of Stripe, PayPal, and GoFundMe were questioned during the first hour. The second hour was taken up by GiveSendGo's two founders.

Stripe's role in all of this seems the most questionable to me, and credit goes to Members of Parliament Demoff, MacGregor, and Chiang for trying to tease out Stripe's line of thinking. Why did Stripe, one of the largest payments facilitators in the world, keep connecting GiveSendGo's convoy fundraiser long after it was clearly illegal under Canadian law?

Stripe is a payments processor. It provides online stores and websites with access to the all-important Visa and MasterCard payments networks. During the committee meeting, we learnt that Stripe is the payments processor for both GoFundMe and GiveSendGo. Crowdfunding sites like GoFundMe and GiveSendGo provide a set of tools that campaigners who need funds can use to connect to donors.

GoFundMe shut down the convoy's campaign on February 5 citing violations of its terms of service, specifically a prohibition on violence. In the first hour of the Parliamentary committee meeting, we learnt that GoFundMe based its decision on direct communication with Ottawa's mayor and its police chief.

It's important to realize that the terms of service for GoFundMe, GiveSendGo, and Stripe are broadly similar. They all prohibit transactions that will be used to promote violence. Neither GiveSendGo nor GoFundMe allow campaigns that promote hate. (Notably, Stripe doesn't say anything about hate in its terms of service.) Lastly, all three prohibit their platforms from being used for illegal activities.

GiveSendGo's convoy campaign came online on February 5, almost to the hour that GoFundMe closed down the convoy's original fundraiser. If you haven't heard of GiveSendGo, think of it as the Rebel News of crowdfunding sites. In addition to trumpeting its Christian virtues, GiveSendGo loudly & proudly reconnects any controversial campaign that GoFundMe has cut off, the idea being to exploit America's culture wars in order to gain traction against its crowdfunding competitor. For instance, after GoFundMe halted campaigns such as Kyle Rittenhouse's legal fundraiser and a number of anti-vaccine efforts, GiveSendGo reconnected them. (See my article for the Sound Money Project on this.)

(And that's fine, by the way. As long as people on all sides of the political spectrum are engaged in legal non-violent activities, they should get access to the payments oligopolies Visa and MasterCard. The combative competition between GoFundMe and GiveSendGo achieves that.)

So now you can understand why GiveSendGo would crave a controversial (even illegal) campaign like the trucker convoy. What a perfect marketing stunt for catching the attention of its broadly American user base. But Stripe's reasoning for welcoming the convoy is less clear. Stripe is not a small-time redneck organization mining the culture wars for attention. It's a big multinational payments processor.

Let's try and tease out the legal ambiguities that Stripe must have struggled with beginning on February 5. After conversations with Ottawa's police chief, Stripe's own customer GoFundMe had just cut the convoy off on alleged violence. Yet that very same day Stripe chose to allow the convoy-linked funds to flow across its platform via its other customer, GiveSendGo, even though Stripe's terms of service prohibits violence.

Did Stripe not agree with GoFundMe's assessment that the funds were facilitating violent activity? Perhaps it had better information sources than Ottawa's police chief?  

Maybe Stripe execs decided to treat violence as one of those things that's open to interpretation. A few incidents can be written off as bad apples, leaving the overall campaign in compliance. The just a few bad apples defence seems to have been GiveSendGo's justification. In his account to the House of Commons committee, GiveSendGo co-founder Jacob Wells rationalized hosting the trucker campaign by noting that there are always "fringe elements" in any protest. Perhaps Stripe execs felt the same?

Or was Stripe's decision to connect the convoy fundraiser a case of willful ignorance? That is, was it a case of avoiding becoming too informed about the situation in order to dodge having to make a difficult decision? Unlike GoFundMe, Stripe never seems to have reached out to Ottawa's police chief. And Ottawa's police chief never directly contacted Stripe. Might this combination have allowed Stripe to maintain enough distance that it could determine that the convoy was in compliance with its terms of service?

A version of willful ignorance was cited by GiveSendGo. “We were doing our business, allowing people to raise funds on GiveSendGo. Your government found issue with it, but yet they would not come to us and tell us they found issues," said co-founder Heather Wilson. "The Bible speaks to this, that when you have an issue with somebody you go talk to them and you resolve it." Like GiveSendGo, maybe Stripe deemed the lack of an explicit nudge from Canadian law enforcement to be sufficient to clear the convoy of suspicions of violence.

Let's move on. Violence is one thing, but the bigger issue to me is plain ol' illegality. If violence is open to interpretation, surely illegality is a black and white issue.

As MP MacGregor pointed out in his line of questioning, on February 6 the City of Ottawa had declared a state of emergency. But Stripe continued to process payments for the convoy. Here is MacGregor: "I think we all have a question here. How did Stripe allow this to go so far? Were you not aware of what was happening with these funds?" 

On February 9, the Ottawa police department notified protestors they were engaging in mischief, a criminal offense. The "unlawful blocking" of streets was resulting in citizens being denied the "lawful use, enjoyment and operation of their property," declared the police department's press release, and the convoy was henceforth required to cease its blockade of downtown Ottawa.

Even though the crime of mischief had been publicly cited by the police, Stripe continued to allow the GiveSendGo fundraiser to accept payments. 

Remember, Stripe says that it prohibits illegality. In Stripe's words, you must not use Stripe’s services for "products or services that are in violation of law in the jurisdictions where your business is located or targeted to." So the convoy was in violation of Canadian law, yet Stripe kept the funds flowing.

The illegal nature of the protest only got more explicit with the passage of time. On February 10, an Ontario Superior Court justice signed a restraint order freezing the GiveSendGo funds based on a police affidavit that the funds were facilitating the "indictable offence of mischief."

Surely this was the smoking gun.

Not so. With one hand Stripe froze the funds. That is, it complied with the restraint order by refusing to disburse the funds to the convoy. With the other hand it continued to allow the campaign to raise money. Yep, donors could still use their cards to fund a GiveSendGo campaign that was, by that time, plainly illegal under Canadian law. (The campaign remains open to this day.)

The parliamentary committee meeting never fully explored Stripe's thought process. But if I had an hour with Stripe executives, I'd want them to explain how they squared: 1) GoFundMe's finding of violence with Stripe's own prohibition on violence, and 2) law enforcement's description of the convoy as illegal with Stripe's prohibition against illegal activity. Stripe may very well have a sound legal basis for why they let the convoy fundraiser go on. (Perhaps it would have exposed it to liability in the U.S.?)

Or maybe this was a case of a platform enforcing its prohibition against violence and illegality as loosely as possible (or not at all) in order to continue a profitable relationship. I'd like to know more.


  1. This is an extremely weird post for someone so interested in cryptocurrency. It's pretty clear that as a payments processor Stripe has an interest in processing all consensual transactions not explicitly forbidden by the state and placing the burden of proof on the state to both (a) show that a transaction is illegal and (b) issue an explicit prohibition against a group rather than try to foist enforcement duties/costs onto the company. We're not surprised people want this and more from the block chain, why are you surprised by a payment processor trying to do the same?

    In terms of this particular case, given that the state did not immediately arrest the truckers and clear the road, me thinks thou doth protest too much about what is and is not illegal. Didn't the state know after all that it's illegal for private citizens to blockade a public road? What were they thinking? They thought it would be easier to threaten law abiding businesses than to arrest people actually breaking the law.

    And then the more general principle: the right to free association must extend to economic association or it can be impoverished. Absent a court order, financial institutions should be in the business of processing all consensual transactions. While they have the right to refuse to do business with any group there are so few alternatives I absolutely do not want Stripe to have a point of view on whether a protest is or is not legitimate. Even worse would be a government that can cut off finances for a protest movement, particularly without a court order. You really need the 1st Amendment up there!

    1. Given the quality of your comment, I can see that you really haven't put in the leg work researching the trucker convoy and its aftermath. Various levels of Canadian government plainly described the activity to be illegal, yet Stripe kept processing payments.

    2. Same anonymous commentator here. I really like this blog. In general, I find it extremely insightful. I also appreciate that over the years you have responded to most of the comments that I've left. I'm going to continue to be a loyal reader and apologize if I'm a little rude commenting in the middle of the night. But yes I do think this post was a huge and uncharacteristic miss because it focuses too much on a particular case rather than a general idea or principle. You seem to care a great deal about this particular case, I don't. Your comment accuses me of simply being uninformed, but you missed in all the references to the case that nothing in my argument hinged on the facts of the case.

      In the first paragraph, I gave you an economic analysis: Stripe wants to process transactions, they'd rather the government be responsible for explicitly stating what's illegal and what's not. This is generally true, it's not specific to this case.

      Next in the 2nd paragraph I pointed out that even for the government, there is a difference between the letter of the law and enforcing the law. Yes, I gave you a hard time about the irony in this specific case, but it's a general point: strategic actors make choices about what rules they do or do not enforce. Even the government in the case you've chosen to analyze chose not to immediately make arrests when people illegally blocked the road. The general point is that just because something is illegal does not mean a strategic actor immediately goes about trying to stop it.

      In the third and final paragraph, I point out that there is a general principle at stake of when the government can cut off funds to an organization because that can stifle free speech. You respond that in this particular case that I am simply uninformed: "Given the quality of your comment, I can see that you really haven't put in the leg work researching the trucker convoy and its aftermath. Various levels of Canadian government plainly described the activity to be illegal, yet Stripe kept processing payments." Which activity are you referring to though by which actors? Did the government go to court and get a court order to forbid a particular individual from accepting donations? Or did government officials simply unofficially accuse some of the people accepting donations as having otherwise engaged in criminal activity? Or was it guilt by association with other people not directly involved in fundraiser? These questions do not require an intimate knowledge of the facts of your particular case, they're again questions that get at general principles and it suffices to observe that your post does not address facts pertinent to these principles.

    3. "Did the government go to court and get a court order to forbid a particular individual from accepting donations?"

      Yes, they did. And that fact that you're asking this question suggests that you didn't read the blog post, since it's front and centre.

  2. I agree with Anonymous 3/18/22 02:47 - JP you are applying your talents to an area in which you are out of your depth in this post. The issue is one of fairness & justice. GFM and other payment providers have supported and will continue to support fundraisers for occasionally violent (and non-law abiding) protests from the other side of the political spectrum. However, you claim to be interested in the 'simple truth' of whether Stripe is doing something illegal. Your curiosity, however, is limited to whether Stripe facilitated payments for a group which you seem not to agree with. Your pretense of objectivity is thin and the conversation goes well beyond the point you've raised.

    I do not object to you having an opinion on this issue, but your opinion seems to be that you didn't like the trucker convoy, rather than whether payment processors are supporting (directly or indirectly) violent or otherwise illegal activity. It would be better if you were honest about your beliefs and either make this an opinion post of 'here's another reason to dislike the trucker convoy' (which seems beneath the level of conversation of this blog) or go deep and look into the bigger issue of payment processors and support of violent or illegal activity - which goes back to 9/11 and covers a lot more ground than Canadian truckers.

  3. Yeah I'm a liberal, pro-vax, anti-trucker-protest person who enjoys your post on the history of money; but I agree that you don't explain your position very well. Any society or government can make a law defining something as violence (like blocking a street). And I guess that's what you mean by violence ????? In any case, you don't come off as dispassionate or interested in explaining your position. Sounds like you've got a dog in the race or you did a poor job writing this post.

    1. The issue at question is how Stripe justified its actions. You haven't even mentioned Stripe, its TOS, or its customers (like GoFundMe) in your response, which suggests to me that you didn't actually read the article.

      Try again, I'm waiting.