Canada’s tax agency is reportedly asking a federal court to enforce the Coinsquare cryptocurrency exchange to hand over its client records since 2013. The Canadian Revenue Agency has a dedicated crypto unit in 2018 for conducting audits. Meanwhile, Coinsqaure cryptocurrency exchange has over 200,000 on their platforms. Checking Customers Tax Records by Canada Revenue Agency The tax authority claimed in a September filing that the requested records are needed so that the customers of the crypto exchange comply with the tax regulations of Canada. “The Canada Revenue Agency wants to know the identity of every client of a major Canadian cryptocurrency trading platform as part of its effort to fight tax fraud and the underground economy.” In other words, the tax agency wants to confirm that the users of Coinsqaure exchange have declared all their income, paid their fair share of taxes, and haven’t used cryptocurrencies to hide assets. They will do this by identifying which Canadians are trading on Coinsquare’s platform while comparing it to their past tax filings. A spokesperson of the tax agency 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 high.” Cryptos in Canada Were Used for Offshore Tax Evasion The revenue agency added in the report that last year cryptocurrencies were used extensively in Canada for facilitating offshore tax evasion based on the 54 criminal investigations that it was conducting at the time. The Ontario Securities Commission has previously accused Coinsquare exchange of market manipulation with 840,000 wash trades worth approximately 590,000 bitcoins. That itself represents about 90% of the exchange’s reported trading volume according to the July report. OSC later on settled with the exchange with a fine of $2.2 million. In a statement, the CEO of Coinsqaure said that the exchange is currently reviewing the tax agency’s request. Although it has yet not decided whether it would fight in the court regarding the matter.
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