Canada Targets Thousands of Crypto Users in Expanding Tax Crackdown

Source: ETHNews Original Title: Canada Targets Thousands of Crypto Users in Expanding Tax Crackdown Original Link: https://www.ethnews.com/canada-targets-thousands-of-crypto-users-in-expanding-tax-crackdown/ Canada’s tax authority has intensified its pursuit of undeclared crypto income by launching a major enforcement action against users of Dapper Labs.

The Canada Revenue Agency (CRA) is compelling the Vancouver-based NFT platform to provide detailed data on 2,500 customers as part of the country’s second-ever probe into crypto tax evasion. The move reflects a widening effort to address what officials describe as a persistent “enforcement gap,” where the agency recovers significant unpaid taxes but struggles to translate investigations into criminal cases.

A Closer Look at the Dapper Labs Customer Investigation

The CRA secured a Federal Court order in September 2025 requiring Dapper Labs to supply information on a defined set of platform users. While the agency initially requested data on the top 18,000 accounts, negotiations resulted in a narrowed demand covering 2,500 specific users. These individuals form what the CRA calls an “ascertainable group,” enabling the agency to verify whether income earned from NFTs and crypto activity has been properly reported.

Dapper Labs itself is not accused of any misconduct. Court orders of this type mirror a precedent set in 2020, when the CRA compelled Toronto-based exchange to hand over customer data. The intention is to gather accurate information about taxpayers whose crypto activity may otherwise remain opaque, especially on platforms known for high-volume trading and popular NFT products such as NBA Top Shot and CryptoKitties.

Millions Recovered but Few Criminal Cases Filed

Despite recovering more than C$100 million in unpaid taxes over the past three years, the CRA acknowledges that it has not secured a single criminal conviction related to crypto tax evasion since 2020. Internal estimates suggest that as many as 40% of users on certain platforms may be non-compliant, but investigations routinely stall due to the difficulty of gathering evidence across multiple jurisdictions and decentralized platforms.

The challenge is significant enough that the federal government plans to launch a new financial crimes agency by spring 2026. The goal is to expand investigative capabilities, streamline data gathering, and reduce the friction involved in pursuing complex digital-asset cases.

A Tightening Regulatory Environment Ahead of 2026

Canada is preparing to implement far-reaching reporting rules that will reshape the level of transparency required from digital-asset companies. Beginning in 2026, the country will adopt the OECD’s Crypto-Asset Reporting Framework (CARF), which mandates annual reporting of customer identities, balances, and transaction data to the CRA. This aligns Canada with a growing list of nations requiring more robust disclosures from crypto-asset service providers.

Regulators have already stepped up enforcement in 2025. FINTRAC, Canada’s financial intelligence authority, issued a record C$176.96 million penalty to Cryptomus for violations of anti-money-laundering rules, alongside a C$19.5 million fine against another exchange. These actions reflect a broader shift toward stricter oversight as crypto adoption grows and authorities work to close long-standing compliance gaps.

A Defining Moment for Canadian Crypto Oversight

The Dapper Labs user probe places Canada’s crypto market under heightened scrutiny at a time when regulators are preparing for much deeper data visibility. The combination of court-ordered disclosures, upcoming CARF reporting requirements, and the creation of a new financial crimes agency signals a decisive turn in how the country intends to track and tax digital-asset activity. For thousands of users caught in the latest sweep, this marks a new phase of crypto compliance, one where transparency will no longer be optional.