The Canadian Revenue Service (CRA) is asking the court to order the country’s leading Cryptographic Currency Exchange, Coinsquare, to transfer all its users‘ data from 2013. This is reported by The National Post.
The corresponding application – the first in the history of Canada – was sent by CRA in September. It states that this information is necessary to ensure that Coinsquare customers „comply with their obligations“ under the country’s tax law.
In other words, CRA wants to verify that all clients have paid taxes and have not used cryptographic currency to conceal assets. This is expected to be done on the basis of tax returns for previous years.
Tax lawyer David Piccolo explained that a more extensive audit can be initiated if discrepancies are identified with regard to a trader. He noted the importance of CRA going to court, as this is the first active action by the agency to obtain such a large amount of information about the customers of a crypt currency exchange.
Piccolo does not rule out that in this way the agency wants to „feel the ground“ for the possibility of gathering such information in the future.
Coinsquare has stated that it is studying the CRA request and has not yet decided on its future actions.
The CRA representative declined to comment on the grounds that the case is being heard in a federal court.
It also refused to confirm or deny a possible link between its actions with Coinsquare and the penalties imposed on the exchange earlier this year.
In July, Cole Diamond, CEO of Cole Diamond, founder Virgil Rostand and Managing Director Felix Meiser left their positions at the request of the Ontario Securities Commission (OSC), which accused Coinsquare of falsifying trading volumes. All of them were also awarded heavy fines.
According to the regulator, between 17 July 2018 and 4 December 2019, 90% of Coinsquare volumes were artificially created through laundering trading, a strategy in which one party to a transaction is both a seller and a buyer.