Tax agencies are now aware of the capital gains in the cryptocurrency space and want traders and investors to pay the taxes from the profits they have made in the market. Some tax agencies collect customer records to ensure that traders and investors accurately report their cryptocurrency earnings.
Judge orders Coinsquare to hand over tax records
A judge has ordered cryptocurrency exchange Coinsquare to hand over customer records to Canada’s tax authority, the Canada Revenue Agency (CRA). The CRA has been battling to gain access to numerous customer data held by Coinsquare, and they have gotten access to some of them.
A federal judge issued an order to the cryptocurrency exchange to hand over detailed information on its Canadian customers, their crypto trading activities and other relevant information to the CRA.
According to Coinsquare, the CRA will collect roughly 5-10% of its 400,000 customers’ information. The court documents revealed that only high-value accounts would be affected as the CRA is currently targeting them.
The CRA is also expected to request more customer data from the cryptocurrency exchange. The tax agency would do so using the Unnamed Persons Requirement” (UPR) method. According to the CRA, the agency needs Coinsquare’s customer information to ensure that traders and investors comply with Canada’s Income Tax Act (ITA) and Excise Tax Act (ETA).
CRA wins after months of court battle
Coinsquare now has 15 days to comply with the order. This latest development comes seven months after the CRA began pursuing Coinsquare’s customer data in court. The case is similar to that of Coinbase and the Internal Revenue Service (IRS).
After a long period in court, Coinbase was ordered to hand over records of over 13,000 customers. Coinsquare stated that the CRA’s victory was partial as only a handful of its customer would be affected.