Does Binance Report to the CRA?
Have you traded on Binance in Canada? The CRA likely knows more about your transactions than you think. Learn how and what Binance reports to the CRA.
Binance withdrew operations from Canada in 2023 following regulatory pressure.
As such, it’s unlikely the exchange will share data with the CRA in the future.
The CRA actively seeks data from exchanges, including historical data from lawsuits, so you should still report any previous transactions accurately.
Is Binance legal in Canada?
No. Binance withdrew services and operations from Canada in 2023 due to regulatory pressure, meaning the platform cannot legally operate in Canada any longer.
Why isn’t Binance legal in Canada?
Canada has a complex regulatory environment for crypto businesses. Exchanges must be regulated by FINTRAC, as well as potentially provincial-level regulatory bodies, to operate in Canada legally. As such, many large global exchanges opt not to operate in Canada, including Binance.
Read next: Best Crypto Exchanges Canada
Does Binance report to the CRA?
Given that Binance does not operate in Canada, it’s unlikely the platform shares data with the CRA.
Exchanges legally operating in Canada are required to register with FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) and implement KYC verification processes. This data may be shared with other relevant agencies, including the CRA.
What do crypto exchanges report to the CRA?
The CRA hasn’t exactly been forthcoming about the information it receives from crypto exchanges. What we do know about the CRA’s approach is that it involves:
Data collection from cryptocurrency exchanges. The CRA has announced that it is actively working with crypto platforms to obtain customer information. This data is used to monitor Canadian crypto investors and ensure that individuals are accurately reporting their cryptocurrency holdings and paying the appropriate taxes.
Regulatory measures have strengthened the CRA’s oversight capabilities. Since January 2022, all money services businesses in Canada are required to notify the CRA of any transactions exceeding $10,000. This means that if a person sends $10,000 or more to a crypto exchange, the transaction is automatically reported. Moreover, crypto exchanges registered with FINTRAC (the Financial Transactions and Reports Analysis Centre of Canada) must collect and verify customer identification, including government-issued ID and proof of address. This creates a direct link between individuals and their exchange wallets, facilitating the CRA's ability to associate specific transactions with taxpayers.
The CRA also leverages international cooperation by participating in the Joint Chiefs of Global Tax Enforcement (J5), a coalition of tax authorities from multiple countries. Through this collaboration, the CRA gains access to cross-border data and insights into global crypto activity, enabling it to pursue cases of international tax evasion involving digital assets.
The CRA employs advanced blockchain analysis tools to trace the movement of cryptocurrencies across public ledgers. Despite the perception of anonymity, blockchain transactions are publicly recorded and can be analyzed to detect patterns and potentially link wallet addresses to individual taxpayers. This allows the CRA to identify those who may be underreporting or failing to disclose their crypto income entirely.
How do I report my Binance taxes to the CRA?
If you have previous gains, losses, or income from Binance transactions, you should report these to the CRA, either via a voluntary disclosure or by amending a previous tax return.
Binance does not provide Canadian investors with tax forms, which is why most investors opt to use a crypto tax calculator like Koinly to help them calculate their gains, losses, income, and more.
Read next: Canada Crypto Tax Guide
Report your crypto taxes with Koinly
Koinly simplifies crypto tax reporting for Canada. Easily import your transaction data through API integration or by uploading a CSV file from more than 900 supported exchanges, wallets, and blockchains.
Once your data is in, Koinly automatically calculates your capital gains, losses, income, and more, then generates the necessary reports to help you file with the CRA.
FAQs
Do I have to pay tax on my Binance transactions?
Yes. Any capital gains or business income from your crypto transactions are taxable. Learn more in our crypto tax Canada guide.
Do I need to file a Form T1135 for Binance?
Individuals with specified foreign property (SFP), including crypto assets, with an aggregate cost basis of more than $100,000 CAD at any point during a financial year may be required to file Form T1135 with the CRA. Canadian crypto investors with more than $100,000 may be required to file T1135 depending on where their assets are held.
Is Binance registered with FINTRAC?
No. Binance is not registered with FINTRAC and does not operate in Canada.
How do I avoid Binance taxes in Canada?
You can’t legally avoid crypto tax in Canada, but you can utilize strategies to minimize your tax bill, including tax loss harvesting. Crypto tax tools like Koinly have features like a tax optimization tool to help you do this. Learn more in our guide on how to avoid crypto tax in Canada.
