Register on the Bybit exchange and receive a bonus of $4000.

Crypto service providers in Canada must report transfers and customer data by 2027

This is a signal to companies operating in this space that regulators are becoming more involved in monitoring and controlling cryptocurrency activities.

Date: 2024-04-18 Author: Marek Stiller
Crypto service providers in Canada must report transfers and customer data by 2027

Crypto companies in Canada will soon face increased disclosure obligations, according to regulations introduced in Tuesday’s 2024 federal budget.

The Canadian government has stated that it intends to implement the Cryptocurrency Reporting Framework (CARF). The framework, approved by the Organization for Economic Cooperation and Development (OECD) in August 2022, implements a mandate established by the G20 in April 2021. They call on the OECD to develop a system to facilitate the automatic exchange of tax information on crypto assets.

Canada’s budget suggested allocating 51.6 million Canadian dollars ($37.3 million) to the Canada Revenue Agency for a five-year period beginning in 2024-2025, followed by an annual allocation of CAD$7.3 million ($5.2 million) for subsequent years to cover implementation and administration costs.

The upcoming annual reporting obligations will apply to crypto asset service providers based in or operating in Canada’s jurisdiction. These providers will include exchanges, cryptocurrency brokers, dealers and cryptocurrency ATM operators.

Register on ByBit exchange

Canada implements measures to track cryptocurrency transactions

Under the system, the Canada Revenue Agency (CRA) will require annual reporting of the value of transactions involving exchanges between cryptocurrencies and fiat currencies, exchanges between different cryptocurrencies, and cryptocurrency transfers.

However, reportable crypto assets will not include central bank digital currencies (CBDCs) and other electronic money products. Instead, they will be included in the expanded scope of the existing OECD Common Reporting Standard.

In addition, service providers will be required to report detailed information about their customers. This information includes names, residential addresses, dates of birth, jurisdiction of residence and taxpayer identification numbers. The reporting requirements cover both Canadian resident and non-resident customers.

The measures are expected to be implemented in calendar year 2026, with an initial exchange of reported information in 2027.

Public funds struggle with limits on cryptocurrency investments

In January, Canada’s securities regulator proposed regulations for public investment funds seeking exposure to crypto assets. Specifically, the proposal restricts the direct purchase, sale and holding of crypto assets to alternative investment funds and non-convertible mutual funds.

In addition, publicly offered asset funds will be prohibited from purchasing or holding NFTs due to their “features that are inconsistent with mutual fund products offered to retail investors.”

Sign up for ByBit exchange
Marek Stiller
Marek Stiller
Founder of the "Cryptocurrency for Beginners" channel on YouTube. He collaborates with Łukasz to form the Arena Trading group, while at the same time being passionate about blockchain technology. His knowledge and experience in the cryptocurrency industry help beginner investors better understand this dynamic market.
Register on the Bybit exchange and receive a bonus of $4000.
Get Bonus