Canada’s Tax Authorities Target Dapper Labs
In a noteworthy development, Canada’s tax authorities have secured a legal mandate to compel Dapper Labs, the creator of popular NFT platforms like NBA Top Shot and CryptoKitties, to provide information concerning 2,500 of its users. This decision signals a substantial intensification of the Canada Revenue Agency (CRA)‘s efforts to scrutinize cryptocurrency tax compliance, following the court’s order issued in September 2025.
CRA’s Data Collection Efforts
Initially, the CRA aimed to gather data on approximately 18,000 account holders to aid in the ongoing investigation into unreported cryptocurrency earnings. However, after discussions, the agency refined its request to the more manageable figure of 2,500 users, as indicated by reports from the CRA.
It is important to note that Dapper Labs itself has not faced any allegations of misconduct in this matter. The recent court ruling parallels a 2020 precedent when the CRA acquired user data from Coinsquare, another crypto exchange based in Toronto. Over the past three years, the CRA has claimed to recover more than C$100 million tied to unpaid crypto taxes but has yet to achieve any criminal convictions for tax evasion related to cryptocurrencies since 2020.
Challenges in Enforcement
Internal assessments by the CRA suggest that around 40% of users on specific platforms might be failing to meet tax obligations, complicating enforcement efforts, particularly given the challenges of obtaining evidence across decentralized networks and diverse jurisdictions.
Future Regulatory Developments
Looking toward the future, the Canadian government intends to set up a new financial crimes agency by the spring of 2026, aimed at enhancing investigatory powers and simplifying the gathering of data related to digital asset cases. Furthermore, starting in 2026, Canada will implement the OECD’s Crypto-Asset Reporting Framework, which will require crypto service providers to disclose customer information, balances, and transaction details annually to the CRA, aligning Canada with other nations enhancing regulations in the digital asset landscape.
Increased Regulatory Actions
Regulatory actions have ramped up in 2025, as evidenced by significant fines issued by FINTRAC, Canada’s financial intelligence agency—most notably a C$176.96 million penalty against Cryptomus for anti-money laundering infractions and a C$19.5 million fine imposed on KuCoin for similar offenses. Collectively, the ongoing court orders, new reporting demands, and the creation of a dedicated financial crimes unit illustrate a robust expansion of Canada’s strategies towards cryptocurrency taxation and compliance enforcement.
