Canadian tax administration asks court to force crypto exchange to transmit data on all users


Canadian tax authorities have reportedly been asking a federal court to force the Coinsquare cryptocurrency exchange to transmit information and certain documents about all of its users since early 2013. The Canadian crypto exchange has more than 200,000 users.

Canada Revenue Agency wants data on all Coinsquare users

The Canadian tax administration has asked a federal judge to force Coinsquare “to hand over information and certain documents on all of its customers” since early 2013, the National Post reported on Friday, adding:

The Canada Revenue Agency wants to know the identity of every client of a major Canadian cryptocurrency trading platform as part of its efforts to combat tax evasion and the underground economy.

The tax agency claimed in a September filing that all of the requested information is necessary to ensure customers of the crypto exchange are in compliance with Canadian tax laws.

“Given the pseudo-anonymous nature of cryptocurrencies, the extent of non-compliance with Canadian tax obligations is difficult to measure,” explained Charles Drouin, spokesperson for the Canada Revenue Agency (CRA) . “However, the CRA assumes the risk of non-compliance is high.”

The Canadian tax agency created a dedicated crypto unit in 2018 to conduct crypto-related audits. The regulator told the Journal de Montreal last year that cryptocurrencies were increasingly used to facilitate offshore tax evasion in the 54 criminal investigations it was conducting at the time.

In the United States, the Internal Revenue Service (IRS) has taken a similar approach, asking a court to force Coinbase to transmit customer data.

The Toronto-based cryptocurrency trading platform Coinsquare launched in late 2014. It had approximately 235,000 customer accounts as of December 14, 2019, according to the Ontario Securities Commission (OSC). The regulator accused the exchange of market manipulation with 840,000 wash trades worth around 590,000 bitcoins, representing about 90% of the trading volume reported by the exchange, the OSC detailed in a report released in July. The Commission subsequently settled with the exchange, imposing a fine of $ 2.2 million.

Coinsquare CEO Stacy Hoisak said in a statement to the National Post that her company is reviewing the CRA’s claim and has not yet decided whether it will challenge it in court.

Do you think Coinsquare should fight Canadian tax authorities in court or pass on customer data? Let us know in the comments section below.

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