Introduction
Ethereum Classic (ETC) is the original Ethereum blockchain that continued on the unaltered path after the DAO hard fork in 2016. While it shares much of Ethereum’s architecture, ETC has distinct use cases and a dedicated community. Canadian users involved in mining, trading, or holding Ethereum Classic must treat it like any other digital asset — with clear tax obligations tied to every transaction.
Whether you’re using ETC for investment, mining, or development, the CRA considers it a taxable property. This article outlines what Canadians need to track when interacting with Ethereum Classic.
Buying and Holding ETC
When you buy ETC with Canadian dollars, there’s no immediate tax liability. However, you must document the purchase amount, date, and any associated fees to calculate your adjusted cost base (ACB). This ACB is essential for determining future capital gains or losses when the asset is sold or exchanged.
If you received ETC from a past chain split (such as from holding ETH during the DAO hard fork), that distribution could have tax implications based on the value of the asset at the time it was credited to your wallet. These events should be reviewed with a tax professional if not yet reported.
Mining ETC and Business Income
Ethereum Classic remains one of the few proof-of-work networks still actively mined. If you're mining ETC, the CRA generally considers the value of coins received as business income, not capital gains.
The fair market value of mined ETC on the day it's earned must be reported as taxable income. In return, Canadian miners can deduct reasonable expenses, such as electricity, hardware depreciation, software licenses, and hosting fees. Accurate logs of mining operations and receipts are essential to support these deductions.
Selling or Trading ETC
Selling ETC for fiat or exchanging it for another cryptocurrency (like ETH or LTC) triggers a taxable event. The CRA requires you to calculate the difference between the ACB and the fair market value received, reporting the result as a capital gain or loss.
Crypto-to-crypto trades are often overlooked, but they are equally reportable under Canadian tax law. It’s also important to track any fees paid during these transactions, which may be included in the ACB or deductible in certain cases.
Wallet Transfers and Custodial Movements
Transferring ETC between your own wallets is not a taxable event. However, to avoid confusion during tax time, you should maintain detailed records of wallet addresses, transfer dates, and ACB continuity. This is especially important if you use a combination of custodial and non-custodial wallets.
Staking and Yield (Not Applicable)
ETC does not use a proof-of-stake model and does not offer native staking. If you earn ETC through third-party lending platforms or liquidity pools, these rewards may be considered interest or business income and should be reported accordingly at the time of receipt.
Conclusion
Ethereum Classic may seem simpler than newer Layer 1 chains, but its tax treatment under Canadian law is equally serious. Whether you're holding, mining, or transacting, proper documentation and timely reporting are essential to stay compliant.
Block3 Finance helps Canadian crypto users and miners manage the tax side of Ethereum Classic — from mining income to crypto trades. Our team ensures every ETC transaction is correctly recorded and CRA-compliant.
If you have any questions or require further assistance, our team at Block3 Finance can help you.
Please contact us by email at inquiry@block3finance.com or by phone at 1-877-804-1888 to schedule a FREE initial consultation appointment.
You may also visit our website (www.block3finance.com) to learn more about the range of crypto services we offer to startups, DAOs, and established businesses.