A federal judge in Canada issued an Order compelling Coinsquare Ltd to divulge customer details to the Canada Revenue Agency.  Coinsquare is a crypto-exchange based in Toronto.

In a statement posted to its blog, Coinsquare characterized the result as a “significant victory.”  According to Coinsquare, instead of providing the CRA with all client data dating back to 2013 as was initially requested, Coinsquare and the CRA agreed that information relating to 90-95% of the clients would not be disclosed.

Coinsquare will provide information for accounts falling into the following categories:

  • customers who ho have had accounts valued at CAD$20,000 or more on Dec. 31 in any year between 2014 through 2020;
  • customers who have cumulative deposits of CAD$20,000 or more since the account opening; and 
  • the 16,500 largest customer accounts by trading volume in CAD$ between 2014 and 2020.

The information to be disclosed may include information regarding deposits, withdrawals or trades made on the Coinsquare platform or over-the-counter. 

Coinsquare is the first exchange from which CRA sought customer information but there will likely be others.  Coinsquare said that it hopes that its victory will set a precedent for other companies in the cryptocurrency industry to defend their clients’ privacy and to limit any disclosure to only what is absolutely required under Canada’s tax law.

This battle between Coinsquare and the CRA is reminiscent of the one in the United States between Coinbase and the Internal Revenue Service.  In 2016, the IRS initially requested information concerning 500,000 accounts.  Coinbase ultimately provided information for about 13,000 accounts.

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David Zaslowsky has a degree in computer science and, before going to Yale Law School, was a computer programmer. He is currently the Chairman of the Litigation Department of the firm’s New York office. His practice focuses on international litigation and arbitration. He has been involved in cases in trial and appellate courts across the United States and before arbitral institutions around the world. Many of David’s cases, including some patent cases, have related to technology. Since 2008, David has been included in Chambers for his expertise in international arbitration.