Changing Crypto banks - report loss/gain?

Tax Topics
1

The whole crypto currency is a bit of an enigma for me, so please help me understand if there are any tax implications of the following:

A client had some bitcoin held at crypto bank A and in 2021, he changed ‘banks’ and transferred the bitcoin to crypto Bank B. There were some fees associated with changing crypto banks. The amount of crypto he is holding is the same, but the value of it has changed from the time he initially bought the bitcoin and put it in crypto bank A, and the moment he transferred it to cryptobank B. Is there capital gain to declare for the increase in value from bank A to B with new ACB at bank B? Is it a ‘disposition’ by transferring from bank A to bank B even though the currency was never changed and no bitcoin was ‘cashed out’ and the quantity never changed ?

2

See CRA guidance below. I think you have to determine whether the holdings are on account of business or property - per the usual criteria. Then, I suppose, if you determine it is a capital holding, the replacement property rules should apply - i.e. no gain or loss until the holdings are sold. But, I’m just guessing…

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3

Thanks Nezzer, I am thinking it falls under capital holdings/replacement property too, but waiting to chat with the client more about this to better understand how these ‘banks’ work and what transferring funds between accounts actually entails - and whether it is equivalent to transferring stock holdings between brokerages…