The situs of cryptoassets should be determined by the location of where functional control thereof is exercised

Pursuant to s. 233.3, “reporting entity” Canadian taxpayers are required to file information returns disclosing holdings of “specified foreign property”, including “intangible property … situated, deposited, or held outside Canada” where the total cost amount at any time in a taxation year exceeds $100,000.

It is suggested that the situs of cryptoassets should be determined with reference to functional control, namely, the authorized ability to use and transfer them, is exercised.

Where cryptoassets are held with a registered Canadian crypto trading platform (which, as such, is required to comply with custodial requirements imposed by provincial securities regulators), or on a cold storage device in Canada, the meaningful decisions and actions regarding their use are executed in Canada, thereby satisfying the above test.

Neal Armstrong. Summary of Jeffrey Lu and Jason Rosen, “Applying Foreign Property Reporting Requirements to Cryptoassets,” Canadian Tax Focus, Vol. 15, No. 4, November 2025, p. 14 under s. 233.3(1) – specified foreign property – (a).