In recent times, the Canada Revenue Agency (CRA) has noted a significant concern regarding cryptocurrency users and taxation. Approximately 40% of individuals engaging with crypto platforms may inadvertently fail to fulfill their tax obligations.

This revelation is part of a broader initiative by the CRA to integrate crypto transactions into the existing tax framework effectively.

This proactive approach has triggered audits, legal orders for information, and considerable tax revenue recoveries, although the frequency of criminal charges remains notably low.

Understanding Audit Outcomes

Data from the CRA indicates a concerning trend: about 15% of individuals flagged for crypto activity have entirely omitted to submit their tax returns. It is estimated that an additional 30% of those who filed still harbor substantial risks of under-reporting or similar compliance issues.

To address these challenges, a specialized unit within the CRA, consisting of around 35 auditors, has managed upwards of 230 audits focused on crypto-related activities.

Canada’s crackdown on cryptocurrency taxes is yielding significant results. However, the question persists: why are there no criminal prosecutions?

— BNN Bloomberg (@BNNBloomberg) December 8, 2025

As a result of these efforts, the CRA has been able to recover over C$100 million in unpaid taxes, although differing reports put the figure closer to C$72 million based on the cases included in the analysis.

Dapper Labs And Legal Proceedings

A notable legal action involved a platform operated by Dapper Labs, where the CRA successfully secured a court order to obtain information for around 2,500 users, out of an original pool of approximately 18,000 accounts under scrutiny.

This shift in strategy demonstrates the CRA’s increasing willingness to approach the judicial system for assistance in acquiring necessary user data instead of solely relying on audit notifications.

Given the complex nature of crypto transactions, which often span multiple jurisdictions, obtaining organized records without platform cooperation presents a significant challenge.

Challenges in Pursuing Criminal Charges

Legal analyses highlight a noteworthy statistic; the CRA has achieved civil recoveries but has not pursued any criminal prosecutions related to cryptocurrency since 2020.

This void indicates various practical and legal obstacles. In order for tax fraud cases to transition to criminal prosecution, there must be irrefutable evidence demonstrating that an individual intentionally evaded their tax obligations.

The intricate and often convoluted transaction histories associated with cryptocurrencies can obscure intent and raise questions about the proper tax treatment of specific tokens, thus complicating criminal referrals.

Implications for Cryptocurrency Users and Platforms

For Canadian investors, collectors, and traders, the message is unequivocal: maintaining comprehensive records is essential. Observers note that regulatory bodies in Canada, including financial oversight organizations, are enhancing their scrutiny of crypto platforms and foreign exchanges that engage with Canadian clientele.

Entities and individuals who may have inadequately documented their activities or relied on assumed privacy may face increased discovery during audits or through court orders.

Featured image from Unsplash, chart data courtesy of TradingView