Canada’s tax authority says as many as 40 per cent of digital-asset users may be evading taxes, expanding its scrutiny of exchanges as global reporting rules tighten.
A new report issued earlier this month by the Canada Revenue Agency (CRA) indicates that crypto-related non-compliance remains widespread after auditors uncovered CAD$100 million in unpaid taxes during the last three years.
A dedicated team of 35 “cryptoasset auditors” reviewed more than 230 files and found patterns that suggest up to 40 per cent of taxpayers using digital-asset platforms either avoided taxes or sat at high risk of doing so. Officials say many users likely broke rules unintentionally. They add that the agency still faces serious limits when attempting to identify crypto participants.
The CRA told The Canadian Press that it cannot reliably determine which taxpayers operate in the sector, even as digital assets flow through both domestic and offshore platforms. Auditors say the evidence gap prevents them from laying criminal charges, and no prosecutions have been filed since 2020. However, the agency continues to push for broader visibility into trading activity.
The CRA recently obtained a court order compelling Vancouver-based Dapper Labs to release information on 2,500 users. The agency had originally sought data on the platform’s top 18,000 customers. Negotiations with the company and its legal counsel produced a narrower agreement. In addition, the order marked only the second time a Canadian court forced a crypto firm to disclose client records.
A similar order targeted Toronto exchange Coinsquare in 2020. The company later announced that it would provide information on accounts worth CAD$20,000 or more on December 31 in the years 2014 through 2020.
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Agency found CAD$54M in unpaid taxes for 2023-2024
Coinsquare said the CRA also sought details on 16,500 of its highest-volume accounts. Executives argued that the final deal represented only a fraction of the data initially requested. They said the agreement withheld information for up to 95 per cent of clients. Coinsquare added that it expected other exchanges to face comparable demands from the tax authority.
By mid-2024, that prediction proved accurate. The National Post reported that the CRA held about 400 active audits or examinations involving crypto assets. The agency also reassessed CAD$54 million in suspected unpaid taxes for the 2023-2024 fiscal year that involved undeclared digital-asset transactions. Auditors say better data access will remain crucial as trading volumes grow.
International rules may accelerate Canada’s enforcement push. Earlier this month, the Organisation for Economic Co-operation and Development (OECD) said 75 jurisdictions now back its Crypto-Asset Reporting Framework (CARF). The OECD said most major digital-asset centers have joined the initiative. The framework requires participating countries to exchange taxpayer information tied to crypto trades, wallet activity and platform accounts.
Canada signed on to CARF in November 2024. Officials say the commitment will help the CRA compare foreign records with domestic filings. Additionally, analysts say the framework gives countries a way to track transactions across borders, even as decentralized protocols expand. The CRA is already preparing internal systems to receive the data.
Digital-asset firms in Canada expect more inquiries as regulators adapt to global standards. Many platforms say they plan to cooperate while protecting legitimate privacy interests. However, tax lawyers note that authorities will push harder for disclosures as enforcement tools strengthen.
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Canada has tightened regulations
In previous years, the CRA has tightened its approach to digital assets as audits expand and global reporting rules advance. The agency treats cryptocurrencies as commodities, and it taxes gains when users sell, trade, or spend them.
Auditors say many Canadians remain unaware of these obligations. The CRA increased its enforcement capacity by building a team of cryptoasset auditors and obtaining court orders for customer data from platforms, including Dapper Labs.
Additionally, officials say the upcoming adoption of the OECD’s Crypto-Asset Reporting Framework will strengthen future compliance by allowing cross-border tax information sharing.
Other federal bodies also moved to regulate the sector. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) treats crypto platforms as Money Services Businesses.
These platforms must register, verify customers, maintain compliance programs, and report suspicious transactions. FINTRAC issued larger penalties in recent years, and it expanded its intelligence-sharing powers after amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
Securities regulators tightened oversight as well. The Canadian Securities Administrators (CSA) created a registration regime for crypto trading platforms.
Additionally, regulators required platforms to segregate assets, ensure custody standards, and follow investor-protection rules. Several firms left Canada after refusing to comply with the framework.
The federal government also advanced rules for stablecoins. Its 2025 proposal required issuers to register with the Bank of Canada, maintain liquid reserves, and meet disclosure expectations. Consumer agencies issued guidance warning that crypto assets remain volatile and not legal tender, and they urged users to assess risks before trading.
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