Does Coinbase Report to the CRA?
If you’ve used Coinbase in Canada, the CRA may already have details about your crypto. Find out what Coinbase shares with the CRA and how it could affect you.
The CRA actively collects information from crypto exchanges, including past transaction data obtained through legal actions.
Coinbase is registered with both FINTRAC and the CSA. It must follow regulations that require collecting customer data to prevent tax evasion and money laundering.
As one of the world’s largest crypto exchanges, Coinbase has likely been pressured by the CRA to share user information.
Is Coinbase legal in Canada?
Yes, Coinbase is legal and fully authorized to operate in Canada.
In April 2024, Coinbase was officially registered as a Restricted Dealer by the Canadian Securities Administrators (CSA), becoming the first international cryptocurrency exchange to earn this status. This registration allows Coinbase to legally offer its services in all Canadian provinces and territories.
Read next: Best Crypto Exchanges Canada
Does Coinbase report to the CRA?
Crypto exchanges that operate legally in Canada must register with FINTRAC (the Financial Transactions and Reports Analysis Centre of Canada) and follow Know Your Customer (KYC) verification procedures.
The information they collect can be shared with other government agencies, including the CRA. In other words, it’s highly likely your data is shared with the relevant government agencies.
What do crypto exchanges report to the CRA?
The CRA hasn’t been transparent about the information it receives from crypto exchanges. Here’s what we do know:
Collaboration with exchanges: The CRA has confirmed it works directly with crypto platforms to collect customer information. This data is used to monitor Canadian crypto investors and ensure they are accurately reporting their holdings and paying the correct amount of tax.
Stronger regulatory oversight: Since January 2022, all money services businesses in Canada have been required to report transactions over $10,000 to the CRA. If you send $10,000 or more to a crypto exchange, that transaction is automatically flagged and reported. Crypto exchanges registered with FINTRAC must also verify customer identities using government-issued ID and proof of address. This links individuals to their exchange wallets, making it easier for the CRA to trace transactions to specific taxpayers.
International cooperation: The CRA is part of the Joint Chiefs of Global Tax Enforcement (J5), an alliance of tax authorities from multiple countries. This partnership gives the CRA access to cross-border data and insights into global crypto activity, supporting its efforts to investigate international tax evasion involving digital assets.
Blockchain analysis tools: Despite the perception that crypto is anonymous, blockchain transactions are public and traceable. The CRA uses advanced tools to analyze blockchain activity, detect patterns, and potentially connect wallet addresses to individuals. This helps identify taxpayers who may be underreporting or failing to disclose their crypto income.
How do I report my Coinbase taxes to the CRA?
If you have gains, losses, or income from Coinbase transactions, you must report them to the CRA as part of your annual tax return.
Coinbase does not provide Canadian users with tax documents, which is why many investors use crypto tax calculators like Koinly to help calculate their gains, losses, and income accurately.
Read next: Canada Crypto Tax Guide
Report your crypto taxes with Koinly
Koinly makes Coinbase tax reporting in Canada easy. You can import your transaction data automatically using API or upload CSV files from Coinbase, as well as more than 900 other supported exchanges, wallets, and blockchains.
Once your data is imported, Koinly calculates your capital gains, losses, income, and other relevant figures. It then generates the reports you need to file your taxes with the CRA. Learn more about generating your Coinbase tax documents.
FAQs
Do I have to pay tax on my Coinbase transactions?
Yes. Any capital gains or business income from your Coinbase transactions are taxable. Learn more in our crypto tax Canada guide.
Do I need to file a Form T1135 for Coinbase?
Canadian individuals who hold specified foreign property (SFP), including crypto assets, with a total cost of more than $100,000 CAD at any time during the year may need to file Form T1135 with the CRA. It’s unclear whether Coinbase is viewed as based in Canada. You should seek guidance from a tax professional for advice on your specific circumstances.
Is Coinbase registered with FINTRAC?
Yes. Coinbase Canada, Inc. is registered as a Restricted Dealer in every Canadian province and territory and is also registered with FINTRAC as a Money Services Business (MSB #M22815925).
How do I avoid Coinbase taxes in Canada?
While you can’t legally avoid paying crypto tax in Canada, there are legitimate strategies to reduce your tax bill, such as tax loss harvesting. Tools like Koinly offer features like tax optimization to help you take advantage of these strategies. For more details, check out our guide on how to reduce your crypto taxes in Canada.
