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The Canadian tax authority allegedly asked a federal court to force the Coinsquare cryptocurrency exchange to hand over information and certain documents about all of its users since early 2013. The Canadian cryptocurrency exchange has over 200,000 users.
The Canadian Revenue Agency wants data on all Coinsquare users
The Canadian tax authority has asked a federal judge to oblige Coinsquare “to hand over information and certain documents about all of its clients” since early 2013, the National Post reported Friday, elaborating:
The Canada Revenue Agency wants to know the identity of every client of one of Canada’s leading cryptocurrency exchange platforms as part of its commitment to combat tax fraud and the shadow economy.
The tax agency said in a September statement that all required information is necessary to ensure that the cryptocurrency exchange’s clients are complying with Canadian tax laws.
“Given the pseudo-anonymous nature of cryptocurrencies, the extent of non-compliance with Canadian tax obligations is difficult to measure,” said Charles Drouin, spokesperson for the Canada Revenue Agency (CRA). “However, the CRA assumes the opportunity for non-compliance is high.”
The Canadian tax agency set up a dedicated crypto unit in 2018 to conduct audits related to cryptocurrencies. Last year, the regulator told the Journal de Montréal that cryptocurrencies were increasingly being 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) took a similar approach, asking a court to force Coinbase to hand over customer data.
The Toronto-based cryptocurrency trading platform Coinsquare launched in late 2014. It had approximately 235,000 client accounts as of December 14, 2019, according to the Ontario Securities Commission (OSC). The regulator blamed the exchange for market manipulation with 840,000 scrubbing operations worth about 590,000 bitcoins, representing about 90% of the exchange’s reported trading volume, according to the OSC in a report released in July. The Commission subsequently terminated the swap, imposing a $ 2.2 million fine.
Coinsquare chief executive Stacy Hoisak said in a statement to the National Post that her company was reviewing the CRA’s request and had not yet decided whether it would challenge in court.
Do you think Coinsquare should fight the Canadian tax authority in court or hand over customer data? Let us know in the comments section below.
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