Canadian Revenue Agency ramps up crypto audits as 40% of users face tax evasion risks.
Canada’s tax authority has flagged a worrying trend: nearly 40% of crypto platform users are either evading taxes or face a high risk of non-compliance. The Canadian Revenue Agency (CRA) revealed this information as part of its ongoing effort to monitor cryptocurrency transactions and ensure proper tax reporting.
Over the past three years, the CRA’s dedicated cryptoasset program, staffed with 35 auditors, has investigated more than 230 cases. These audits have successfully recovered approximately $100 million in unpaid taxes. Yet, authorities admit that tracking crypto activity remains a major challenge due to gaps in current legislation.
Legal Loopholes Hinder Enforcement
The CRA acknowledges that Canadian law currently limits its ability to identify and monitor taxpayers involved in cryptocurrency trading. “There is no way to reliably identify taxpayers operating in the crypto space and assess compliance,” the agency stated. This has prompted ongoing efforts to secure information from crypto companies, including Vancouver-based Dapper Labs.
Dapper Labs became a focal point of CRA scrutiny after concerns arose about users leveraging its platform to evade taxes. The agency initially requested data on 18,000 top users. However, negotiations between the company, its legal team, and CRA officials reduced the scope to 2,500 users. Dapper Labs did not fully comply but also did not deny the investigation.
Stronger Laws on the Horizon
Recognizing these challenges, Canada’s Department of Finance has announced new legislation aimed at strengthening oversight of crypto activities. The proposed rules are expected to be in place by Spring 2026.
“Fraud and financial crime are evolving rapidly, and so must our response,” said Finance Minister François-Philippe Champagne in October. “From launching a Federal Anti-Fraud Strategy to establishing a dedicated Financial Crimes Agency, our government is committed to safeguarding Canadians’ financial security.”
Crackdown Beyond Taxes
Canada is also targeting broader financial crimes linked to cryptocurrencies. The country’s financial intelligence unit, FINTRAC, recently fined Seychelles-based Peken Global Ltd., operating as KuCoin, over $19.5 million. The penalty came after the exchange failed to register as a foreign money services business in Canada, highlighting the authorities’ intensified enforcement approach.
With crypto adoption rising rapidly across Canada, regulators are under pressure to close loopholes and improve compliance. The CRA’s audits and upcoming legislation signal a more assertive stance against tax evasion, aiming to protect both the integrity of the financial system and the interests of law-abiding taxpayers.
