In March of 2021, Coinsquare announced that we reached an agreement with the CRA with regards to a Federal Court Order to provide for client data and trading records. Under the terms of the agreement, Coinsquare is legally obligated to release certain account and trading data about our clients to the CRA.
In the vast majority of cases, no client data is being turned over to the CRA. The subset of affected clients represents approximately 5% of Coinsquare’s total client base and is made up of the most active clients with high account balances.
This article will hopefully answer some of the questions you might have about the issue. It will be updated frequently, so check back often. You can also reach out to us directly at firstname.lastname@example.org with any questions.
How can I tell if I am an affected client?
All affected clients were notified privately by email.
The email had the subject line: CRA | Coinsquare Tax Summary
If you did not receive this email, you are likely not affected. In total, only 5% of Coinsquare’s total client base was affected.
What criteria were considered to determine whether I was affected?
Clients affected by this disclosure requirement met one or more of the criteria below:
Category A: Customers with accounts with a value of $20,000 CDN or more on: December 31, 2014, December 31, 2015, December 31, 2016, December 31, 2017, December 31, 2018, December 31, 2019, December 31, 2020;
Category B: Customers who have cumulative deposits of $20,000 CDN or more since the account opening; and
Category C: The 16,500 largest Customer accounts by trading volume in CDN dollars between 2014 and 2020, and if not already included, the 16,500 largest Customer accounts by number of trades between 2014 and 2020.
What data is being provided to the CRA?
Coinsquare is legally obligated by the CRA to provide certain data regarding client accounts which meet the criteria for disclosure. This information may include information regarding deposits, withdrawals or trades made on the Coinsquare platform or over-the-counter (OTC), if applicable.
I didn’t receive the affected client email, do I still need to report my trading activities to the CRA?
Clients who are not affected still have to report transaction information to the CRA. While Coinsquare will not formally turn over any transaction records for non-affected clients, you are still obligated to report your capital gains/losses for any cryptocurrency transactions that you have made.
We always recommend reaching out to a registered tax professional for guidance on what actions need to be declared to the CRA.
How can I get a summary of my transaction history?
Clients affected by the disclosure requirement were sent an email containing a direct access link and credentials to obtain their transaction summaries through their "Reporting Vault" (powered by FutureVault).
Non-affected clients can also request a transaction summary by reaching out to email@example.com.
Will closing my Coinsquare account prevent the CRA from getting a copy of my disclosure?
No. Coinsquare is legally obligated to provide account and trading data for clients who meet the criteria, regardless of whether the account is active or inactive.
Further, other Canadian digital asset exchanges may have been or will be faced with similar disclosure obligations.
Where can I go for help understanding cryptocurrency tax implications?
A good place to start would be the CRA’s official guidance on cryptocurrency taxes, which you can find here.
Coinsquare has also published an article with information about cryptocurrency taxes, which can be found here.
Finally, we always recommend that you get help from a registered financial adviser or tax professional for complex tax issues.