The Canada Revenue Agency (CRA) is reportedly asking Coinsquare crypto exchange for user data starting from 2013. CRA requested a federal judge to order the crypto exchange to hand over information pertaining to its clients.
The Canadian tax authority wants to know the identity of users on Coinsquare’s cryptocurrency trading platform. Furthermore, the CRA says this is a part of its effort to fight tax fraud and the underground economy. Even so, the order is necessary to ensure that customers of Coinsquare are complying with Canadian tax laws.
Charles Drouin, a spokesperson for the CRA, said
Given the pseudo-anonymous nature of cryptocurrencies, the scope of non-compliance with Canadian tax obligations is difficult to measure.
However, the CRA presumes the opportunity for non-compliance to be greater, said Drouin. Notably, the CRA has the mandate to audit individuals. Also, it can assess whether they have disclosed and paid their tax obligations.
Suppose a Canadian trader on Coinsquare has not declared any cryptocurrency revenue or trading to the CRA. In that case, the agency may decide to further audit that person or organization, said David Piccolo, a tax lawyer at Tax Chambers.
To add on, Coinsquare CEO Stacy Hoisak told Canada’s National Post that her company was reviewing the CRA’s request. However, Coinsquare has not yet decided on whether to fight the request in court or not.
Before this, the Ontario Securities Commission (OSC) accused the exchange of market manipulation. Remarkably, OSC cited an alleged 840,000 wash trades worth approximately 590,000 bitcoins. According to the July report by the OSC, the trades represented about 90% of the exchange’s reported trading volume. The OSC eventually imposed a fine of 2.2 million CAD.