- Coinsquare is engaged in a battle with the Canadian Revenue Agency over access to user records dating back to 2013
- The tax authority wants to know if any Coinsquare users have misreported their income in the last seven years
- The exchange has endured a torrid second half of 2020, with three executives settling after being charged with market manipulation
Coinsquare has had a torrid second half of 2020 and it could be about to get worse – the Canada Revenue Agency (CRA) is seeking a court order to force the exchange to hand over user and account details going back to 2013. The National Post reported over the weekend that in September the CRA submitted a filing to the country’s federal court demanding that the Toronto-based cryptocurrency exchange hand over certain information about all its customers for the last seven years, news which will send a shiver down the spine of many early cryptocurrency traders.
Coinsquare Lurches From One Headache to Another
Coinsquare has already drawn negative attention to itself this year after three high ranking executives, including the co-founders and CEO, were charged with market manipulation by The Ontario Securities Commission (OSC). The trio settled with the OSC, but their actions might have contributed to the strength of the spotlight being placed on the exchange, which has so far managed to resist the CRA’s efforts to gain access to its books.
According to the National Post, the CRA claims that such a comprehensive examination of Coinsquare’s records is required to ensure that Coinsquare’s customers have “complied with their duties and obligations” under Canadian tax laws.
By accessing the information they seek, the CRA would be able to check on balances, withdrawals, and deposits of all the exchange’s users, which they could compare with annual tax returns to see if anyone has been reporting lower income than they actually earned.
Coinbase Precedent Offers Some Hope
The UK tax authorities attempted the same all-encompassing data grab in the UK with Coinbase, but Coinbase succeeded in reducing the scope of the request down to a single tax year. Coinsquare users will no doubt be hoping for a similar outcome in their case, with many who have neglected to accurately report their earnings potentially finding themselves facing a large tax bill.