Canada Revenue Agency requests data on all Coinsquare clients, the country’s leading cryptocurrency exchange.

The Canada Revenue Agency (CRA) has asked a court to compel Coinsquare, the country’s leading cryptocurrency exchange, to hand over data on all of its users dating back to 2013. This was reported by The National Post.

The filing, the first of its kind in Canada, was filed in September. The agency states that the information is needed to ensure that Coinsquare’s clients are “meeting their obligations” under the country’s tax laws.

In other words, the CRA wishes to verify that all clients have paid taxes and have not used cryptocurrencies to conceal assets. It is expected to be carried out on the basis of tax returns from prior years.

Tax lawyer David Piccolo explained that, if discrepancies are found concerning a trader, a broader audit could be initiated. He noted the importance of the CRA turning to the courts, as this marks the first active action by the agency aimed at obtaining such a large volume of information about the exchange’s clients.

Piccolo does not rule out that the agency intends to “test the waters” for the possibility of gathering similar information in the future.

Coinsquare said it was reviewing the CRA’s request and had not yet decided on its next steps.

A CRA spokesperson declined to comment, citing that the matter is before a federal court.

The agency also declined to confirm or deny any link between its actions against Coinsquare and penalties imposed on the exchange earlier this year.

Back in July, at the request of the Ontario Securities Commission (OSC), which accused Coinsquare of fabricating trading volumes, CEO Cole Diamond, founder Virgil Rostand, and managing director Felix Meizer stepped down. All were also fined substantial penalties.

According to the regulator, from July 17, 2018, to December 4, 2019, 90% of volumes on Coinsquare were artificially created through wash trading, a strategy in which one participant acts as both seller and buyer in a trade.

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