The Canada Revenue Agency launches cryptocurrency tax investigation into Dapper Labs users

On December 8, according to The Block, court documents show that the Canada Revenue Agency (CRA) has collected over 100 million Canadian dollars (approximately 72 million US dollars) in taxes through crypto-related audits over the past three years. However, it has not filed any criminal charges since 2020, exposing structural limitations in the country’s enforcement capabilities. The report points out that the CRA has a crypto audit team of 35 people, has handled over 230 cases, and estimates that about 40% of taxpayers using crypto platforms have either failed to report taxes or pose a high compliance risk. Nevertheless, the agency’s chief crypto auditor admitted in an affidavit that the CRA “cannot reliably identify taxpayers in the crypto space or assess their compliance” with income tax obligations. In addition, the report states that the CRA has obtained data on 2,500 users from Dapper Labs (the NFT company behind NBA Top Shot and CryptoKitties) through a court order. The CRA initially requested information on Dapper’s top 18,000 users, but after negotiations with company executives and lawyers, the scope was reduced to 2,500 users. The CRA filed the request with the Canadian Federal Court in September, marking the second time the court has ordered a Canadian crypto company to disclose such information. A similar order was previously issued in 2020 to Coinsquare, a Toronto-based trading platform.