Canadian Tax Agency Collects $72M in Crypto Back Taxes, Struggles to Secure Criminal Charges
Key Takeaways
- The Canadian government seizes 72 million US dollars in crypto taxes. The amount was collected by the Canada Revenue Agency from crypto users who were in non-compliance with the existing tax laws.
- Crypto assets are being misused for tax evasion.
- The government is unable to make a full crackdown. The present laws in Canada have restricted legal entities from taking proper action against the lawbreakers.
- New legislation is on the way to give more regulatory clarity. The unnamed legislation will be presented in the Spring of 2026 in Canada.
The latest news reports that the Canadian government has collected a total of 72 million US dollars worth of unpaid back taxes from crypto traders. However, due to the regulatory constraints, the agency behind the collection was unable to charge any defaulters with criminal cases. The collection occurred after an audit that went back as far as the past three years. However, the lack of any charges filed has stirred suspicions about the Canadian regulations regarding crypto trading.
The agency behind this operation was the Canada Revenue Agency (CRA). According to the agency’s 35 cryptoasset auditors, who are working on more than 230 files, more than 40% of the tax-paying population who are engaged in crypto trading are under serious violation due to non-compliance with tax laws.
Using Crypto For Tax Evasion
From what is understood, the majority of the defaulters are using cryptocurrencies as a way out of paying taxes. These are not crypto enthusiasts or traders; rather, they belong to the category of citizens who are using the power of crypto’s anonymity and the loopholes in the regulatory systems to evade paying taxes.
In a particular concern stated by the government, the taxpayers have been using a Vancouver-based company as a perfect tax evasion tool. However, there are little to no regulatory devices in place at the moment to hold the company accountable for the tax amounts, thus remaining unpaid.
Dapper Labs, the company thought to be the accessory to the tax evasion, has not denied the investigation. However, due to the regulatory fog, out of the 18000 active users, only the details of 2500 users were collected. This number itself was achieved after long negotiations between the company, lawyers, and officials. CoinDesk, one of the leading cryptocurrency news agencies, tried contacting both Dapper Labs and CRA regarding the matter; however, no response was received immediately.
New Law To Gain More Regulatory Control
François-Philippe Champagne, Minister of Finance and National Revenue, stated on October 20th that with the evolving nature of cryptocurrency frauds, the country should improve further and introduce laws to regulate and control them.
In light of the present limitations of the regulatory framework, a new legislation is said to be passed by the Spring of 2026 in Canada. This new regulation could declutter the legal system and help it attain more clarity regarding managing lawbreakers.
Major Road Blocks For The Investigation
One of the major hindrances to obtaining details for the investigation lies in the regulatory complexity. During the investigation, it became obvious that companies cannot be accused of wrongdoing on behalf of unnamed persons.
This has been the factor that limited the CRA’s investigative expanse. While the CRA had targeted a massive 18000 users, the protection that Dapper Labs received courtesy of the law’s loophole reduced the number of audited accounts to 2500.
The Spring law is said to bring serious changes to the present situation so that legal entities can expand their investigative domain and track down even the institutions that facilitate these kinds of actions.
Conclusion
Despite the current regulatory fog, the national agency for fighting money laundering, the FINTRAC, has fined the Seychelles-based crypto exchange Peken Global Ltd., operating as KuCoin, a whopping 19.5 million US dollars for operating under disguise. The company had failed to identify itself as a money transferring agent operating inside and outside Canada.
The action from FINTRAC proves that the crackdown on illegal activities using crypto can be achieved with proper regulatory frameworks. It is the absence or lack of proper laws that fuels such illegal activities. The CRA and several other government agencies are eagerly waiting for the legislation to enforce more regulatory compliance by the Spring of 2026. This law could easily help agencies like the CRA to speed up and scale up their investigations to prevent crypto from being used as a monetary entity in illegal activities that compromise national and global security.
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Crypto & Blockchain Expert