Canada Collects Over $100 Million from Crypto Tax Audits

In a concerted effort to address tax non-compliance, the Canada Revenue Agency (CRA) has identified over $100 million in unpaid taxes linked to cryptocurrency transactions in the past three years. Despite this significant financial recovery, the agency has yet to file any criminal charges related to these cases since 2020.

The CRA’s dedicated team of “cryptoasset auditors” has been scrutinizing more than 200 files, revealing that approximately 40 percent of taxpayers engaging with crypto platforms have either failed to file their taxes or are assessed as high risk for non-compliance. According to an application filed by the CRA in Federal Court, there are growing concerns that some taxpayers are exploiting the anonymity associated with cryptocurrencies and non-fungible tokens (NFTs) to evade their tax obligations.

In a recent affidavit, Predrag Mizdrak, a project leader in the CRA’s digital compliance division, stated that the agency has faced substantial challenges in identifying taxpayers operating within the crypto space. “There is no way to reliably identify taxpayers operating in the crypto space and assess compliance,” Mizdrak noted. This assertion underscores the complexity of enforcing tax regulations in an environment characterized by its borderless nature and the inherent anonymity of digital assets.

In September, the CRA sought a court order to disclose the identities of thousands of clients from Dapper Labs Inc., a prominent company in the NFT market. The initial request targeted 18,000 users but was later negotiated down to 2,500 individuals. This legal move marks only the second occasion where a court has mandated such disclosures under the Income Tax Act, known as an “unnamed persons requirement.”

Despite the CRA’s proactive approach, it has initiated only five criminal investigations involving digital assets since 2020, with four still ongoing as of March 2025. No charges have yet been filed, prompting questions about the effectiveness of enforcement measures. The agency explained that the complexity and length of these investigations vary significantly based on factors such as the number of individuals involved and the availability of evidence.

The CRA reported that it currently employs 35 auditors within its cryptoasset program, focusing on over 230 files. Despite the notable recovery of taxes, the lack of criminal prosecutions raises concerns about the capacity to enforce compliance in this rapidly evolving sector.

Jessica Davis, president of Insight Threat Intelligence and a former employee of FINTRAC (Canada’s financial intelligence unit), remarked on the apparent disconnect between the substantial tax recovery and the absence of criminal charges. “I think people still don’t fully understand that profits made on crypto are actually taxable,” she explained. Davis emphasized the need for stronger enforcement mechanisms, suggesting that the current resource allocation for financial crime investigations may not adequately meet the challenges posed by the crypto industry.

In response to ongoing regulatory challenges, Finance Minister Francois-Philippe Champagne announced in October 2025 plans for the establishment of a Canadian financial crimes agency by spring 2026. This new organization aims to tackle complex cases of money laundering and organized crime, marking a significant step towards enhancing Canada’s regulatory framework in the financial sector.

While the CRA’s initiatives reflect a commitment to curbing tax evasion, the path forward may require increased resources and strategic focus on enforcement. As the digital asset landscape continues to expand, the interplay between regulation, compliance, and enforcement will play a crucial role in shaping Canada’s approach to cryptocurrency taxation.

The CRA’s ongoing efforts highlight the need for continued vigilance in monitoring the evolving challenges posed by cryptocurrencies. As the agency navigates this complex environment, stakeholders await further developments in both regulatory measures and enforcement actions.