CRA Secures $100M from Crypto Audits Amid Stalled Criminal Cases

The Growing Challenge of Crypto Tax Compliance in Canada

The Canada Revenue Agency (CRA) has been actively working to address the complexities of cryptocurrency tax compliance. A specialized team of auditors has revealed that they are currently handling over 200 cases and have collected more than $100 million in taxes over the past three years. Despite these efforts, no criminal charges have been filed against any individuals since 2020.

The CRA's focus on uncovering unpaid taxes has led to significant findings. According to reports, approximately 40% of taxpayers using cryptocurrency platforms have either failed to file their taxes or have not followed the necessary regulations. This issue has become a major concern for the federal government, which is struggling to combat tax evasion and illegal financing linked to cryptocurrencies.

The Struggle with Enforcement Resources

One of the main challenges the government faces is the limited enforcement resources available to tackle crypto-related issues. Cryptocurrencies are often associated with anonymity, making it difficult for authorities to track transactions and identify non-compliant taxpayers. Sources have indicated that documents related to a Vancouver-based crypto firm highlight the difficulty in addressing these issues effectively.

In a recent application submitted to the Federal Court, Canada’s Minister of National Revenue expressed concerns about the use of cryptocurrencies and non-fungible tokens (NFTs) to evade tax responsibilities. The CRA’s key crypto auditor emphasized that the country lacks a reliable method for identifying taxpayers in the crypto industry and ensuring they comply with income tax reporting requirements.

Seeking Legal Action to Identify Tax Evaders

To address this challenge, the CRA sought permission from the Federal Court to disclose the identities of thousands of customers from Dapper Labs Inc., a leading NFT company. The firm operates its own blockchain and provides crypto wallets for storing digital assets. During the investigation, the company did not refuse to cooperate, but the number of users requested was reduced from 18,000 to 2,500 after discussions with officials and lawyers.

This move marked the second time a Canadian crypto company has been asked to provide client information in an investigation targeting potential tax evaders. This type of request, known as an "unnamed persons requirement," is typically conducted under the Income Tax Act.

Insights from a Key CRA Official

Predrag Mizdrak, a project leader in the CRA’s digital compliance and audit support division, highlighted the challenges posed by the cryptoasset ecosystem. In his affidavit, he noted that the sector often engages in the underground economy. His remarks came after data showed that many crypto platforms lack proper compliance with existing guidelines.

Mizdrak also pointed out that around 15% of Canadian taxpayers using cryptoasset platforms have either missed filing their taxes or have not filed them at all. Additionally, 30% of those who file on time are considered high risk for non-compliance.

The Impact of the Pandemic on Crypto Usage

The increased use of cryptoassets during the COVID-19 pandemic has led to more compliance issues for the CRA. The habit of hiding identities, the high volume of transactions, and the ease of creating accounts on various platforms across different countries have contributed to these challenges.

Despite these concerns, the agency has made progress. It reported having 35 auditors in its cryptoasset program, who have handled over 230 cases and collected significant taxes through audits. This includes $100 million earned in the last three years.

Ongoing Criminal Investigations

Between 2020 and early 2025, five criminal investigations related to digital assets were initiated, with four still active as of March. However, no charges have been filed yet. The agency explained that these investigations are complex and often take years to complete.

As the crypto landscape continues to evolve, the CRA remains committed to ensuring compliance and addressing the challenges posed by digital assets. The agency’s ongoing efforts reflect the growing importance of regulating this rapidly expanding sector.