Mass Hong Kong Arrests Of Legistators And Activists Shows Why Bitcoin Is Essential

In Hong Kong, over 50 pan-democrat legislators and activists were arrested in a show of force. They were allegedly arrested for organizing a primary after elections were delayed due to COVID-19 and for planning to veto government budgets. Prosecuted under the new national security law for “subversion�, some of them face up to a lifetime of imprisonment. Hong Kong police said that 1000 officers were involved in the arrests. Among other things, they froze about $1.6m in Hong Kong dollars during the operation — about $200,000 USD, or about $4,000 USD per person if you divided that amount evenly.

This follows HSBC’s (and other banks) freezing of the funds of an exiled Hong Kong legistator. These banks not only froze the funds of this particular politician, they froze the funds of his wife’s bank account as well as those of his parents after the Hong Kong police accused him of misappropriating funds after a crowdfunding campaign. Ted Hui, the legislator, said that it amounted to “political retaliation through economic oppression� and warned that he faced serious consequences if he returned to Hong Kong, including the potential of a lengthy jail sentence.

The freezing and seizures of funds has triggered anxiety and a move across borders when it comes to banking in Hong Kong. Long regarded as a stable financial haven and the link between mainland China and the international financial system, now, some Hong Kongers are seeking to shift funds overseas in order to avoid the seizure of their assets in Hong Kong.

While the police has advanced the argument that this is standard procedure, the broadening of criminal activity into political activity with the advent of the new national security law (which essentially graphs mainland Chinese tenets of individual expression and activity to Hong Kong) has made some people leery of the security of their funds.

After all, subversion of state power (the statute under which legislators and activists are currently being charged) is a broad statute in the People’s Republic of China — anything that “undermines the central government� in mainland China has included dissidents of various stripes who have merely expressed their opinions or published writings advancing a more democratic version of the PRC.

Liu Xiaobo, the Nobel Prize laureate, was famously imprisoned under this legal tool until his death — largely for his writings and essays. In the case of the legislators and activists, “subversion� meant running a primary to try to form a democratically elected opposition to those in Hong Kong’s legislature who are inclined to politically support the central government of the PRC. It’s easy to see in this case how subversion might be expanded to cover a variety of ambiguous cases.

This has led to a search for alternative places to store wealth, alternatives that would ideally flow across borders easily, while allowing any individual to maintain control, without the need to have a third-party manage and potentially censor access to their ledger of funds.

Bitcoin is already something that has somewhat of a history in Hong Kong. The Bitcoin Association of Hong Kong has placed ads across trams and near banks asking for people to “be their own bank�, advancing the argument that people in Hong Kong should consider bitcoin for specifically the self-custody and censorship resistance that it offers.

Yet the same association has warned against new regulations that makes it difficult for Hong Kongers to get access to bitcoin.

The fundamental fact is that once you have access to bitcoin, nobody can deny access to your funds or freeze your funds or access to the international bitcoin network if you have the option to hold your own keys. No banking system around the world can be totally immune to pressure from an immensely powerful geopolitical institution to censor the transfer of funds — yet bitcoin was designed with censorship resistance and content neutrality in mind.

As prices have increased, some ardent skeptics have turned their thoughts around when it comes to cryptocurrencies. While the price point is what probably appeals most to institutional investors, it is thinkers on the intersect of finance and power that might have shifted their views most fundamentally on the intersection between bitcoin and human rights/financial liberty.

The Financial Times and many of its editors have been notably skeptical about bitcoin, yet one of them opined that bitcoin has value “in [a] world [that] slips towards authoritarianism and civil liberties cannot be taken for granted.� 

That world is no longer just a hypothetical in a line of copy. For many in the world, including in Hong Kong, it has become a blunt reality. Bitcoin is essential for situations like this: an option that is censorship resistant, international, and portable by default, in a world where states apply their powers broadly and ambiguously.