Introduction
Block3 Finance CEO Mahad Mohamed was invited by Bitcoin.com, one of the most recognized names in the crypto industry, to sit down and answer the crypto tax questions that most people don't ask until it's too late. The result was a wide-ranging, no-holds-barred conversation that covered everything from audit horror stories to estate planning to a global data-sharing framework that takes effect next year and almost nobody is preparing for.
This wasn't a surface-level interview. Bitcoin.com brought Mahad on because of what he represents in this space: 25 years of accounting experience, a background that includes Big Four firms and the Canada Revenue Agency's own audit division, a personal crypto journey that started on April 11, 2011 when he bought his first Bitcoin at $112 USD, and a firm of 44 full-time accountants that does nothing but crypto tax, audit defense, and corporate structuring.
Mahad didn't hold back. He shared the exact strategies Block3 Finance uses to defend clients in audits, explained why the difference between an "investor" and a "day trader" could cost you tens of thousands of dollars, broke down why Polymarket winnings are taxable in Canada but lottery winnings are not, and issued a warning about CARF 2027, a global data-sharing agreement that will allow tax authorities worldwide to see your crypto holdings across borders.
Below are the key highlights from the conversation. But we strongly encourage you to watch the full interview because Mahad goes much deeper on every topic.
Watch the Full Interview:
If you prefer to watch or listen to the full conversation, you can access the entire Bitcoin.com interview below. It's packed with real examples, direct advice, and the kind of straight talk you won't get from a tax software FAQ page.
Click below to watch the full episode:
Key Highlights from the Bitcoin.com Feature
"If You Haven't Been Scammed in Crypto, You're Lying to Someone"
Before getting into tax strategy, Mahad set the tone for the interview by talking about what 15 years in crypto actually looks like. He didn't sugarcoat it.
“If you have not been scammed in crypto, you're not... you're lying to someone. Every single person that I've seen who's in crypto has been scammed, has participated in leverage, participated in every single thing that's going in a runup.”
From buying Bitcoin on dark web marketplaces as a government employee in 2011, to watching clients lose everything when Celsius and Quadriga collapsed, to now helping people file taxes on AI-generated trading bots and HyperLiquid leverage positions, Mahad has seen every cycle from both sides: as a user and as the accountant picking up the pieces.
That perspective is what Bitcoin.com wanted to tap into. And it's what makes this conversation different from the standard "here's how crypto is taxed" explainer.
440,000 Audit Letters: The CRA Is Not Playing Around
One of the most striking moments in the interview was when Mahad revealed the scale of what's happening right now with government enforcement.
“Canada Revenue sent 440,000 audit letters. Those audit letters are an inquiry to find out if you are a crypto user. And depending on how you answer those questions, they will send you a follow-up question. And all of a sudden, that's how audit starts.”
The pipeline is always the same: inquiry first, then a full audit, then penalties and interest.
In Canada, approximately 17% of the population holds or trades crypto. In the US, that number is around 32%. Not all of them are reporting correctly, and governments on both sides of the border know it.
Mahad explained that both Canadian and US tax returns now include a direct question asking whether you are a crypto holder. If you say yes, they want details. If you say no and they catch you later, the penalties are even worse.
And here's the part that should concern every crypto user: the CRA and IRS are building AI-powered tools specifically designed to crawl on-chain data and match it against tax filings. The days of flying under the radar are ending.
The 15-Transaction Line: Investor or Day Trader?
The interview went deep on a topic that can make or break your tax bill: how governments decide whether you're an investor or a day trader.
The process starts with an eight-page questionnaire from the CRA, IRS, or Revenue Quebec. Around 30 questions covering how you got into crypto, how many hours a week you spend on it, what platforms you use, and how much you know about the space. Based on your answers, they build a profile. Six weeks later comes the audit letter demanding every CSV file from every exchange and DEX you've touched.
Then they compare. What you reported versus what the data shows.
Mahad gave a clear benchmark that every crypto user should memorize:
“If it's more than 10 to 15 transactions for the whole year, you better sit back and say, am I a day trader or am I an investor? That's how the government agencies look at it.”
And here's what catches people off guard. This doesn't just mean manual trades. If you're staking Solana or earning daily rewards on Crypto.com, each daily payout counts as a separate transaction. You could be doing nothing but holding and staking and still rack up hundreds of "transactions" in the government's eyes.
The tax consequence? In Canada, an investor pays capital gains tax. A day trader pays full income tax at rates up to 53%. That difference on a $150,000 gain is the difference between keeping most of it and forking over half to the government.
12.2% vs. 53%: The Corporate Structure Most People Set Up Too Late
This was the segment where Mahad got visibly passionate, and for good reason. The numbers speak for themselves.
A day trader in Canada operating personally pays up to 53% tax. That same income inside a properly structured corporation? 12.2% on the first $500,000.
“Why would you pay 47% versus paying 12.2%? It's not what you make, it's what you keep. I keep saying this because it's really true.”
Mahad's recommendation is clear: if you hold more than $50,000 in crypto and you're doing anything beyond simple dollar cost averaging, you should be operating through a corporation.
The reason most people don't? They wait for the bull market. By then, their $50,000 has become $200,000 and the opportunity to structure properly has passed. You can still incorporate at that point, but you've already lost the ability to shield those gains at the lower rate.
At Block3 Finance, we handle the full incorporation process in 3 to 5 business days. It doesn't matter where you are. Canada, the US, Singapore, Ireland, the UAE, Kenya, Nepal. We've done it across dozens of jurisdictions.
Once incorporated, we use a Section 85 rollover (in Canada) to transfer all personal wallets and crypto holdings into the corporation on a tax-deferred basis. From that point:
The corporation owns the wallets and reports all activity. Tax rates drop from up to 53% to 12.2%. Staking income, DeFi rewards, and trading gains all flow through the corporation. If the owner passes away, the corporation continues to live, protecting the assets for family and avoiding personal probate.
“From now on, the corporation owns it. The corporation is going to report it on their balance sheet. It has nothing to do with you personally.”
Rule of Law vs. Spirit of Law: How We've Never Lost an Audit
One of the most valuable parts of the entire interview was Mahad's breakdown of how Block3 Finance actually wins audits, particularly for clients who lost funds in exchange collapses like Celsius, Quadriga, and Binance's exit from Canada.
The losses from these events are real, but they are not automatic. You can't just write them off on your return without a process behind it.
Here's what Mahad walks clients through:
We gather all email confirmations from the exchange, because every buy and sell notification includes a date, time, and wallet address. We cross-reference with on-chain transaction IDs where available. The client files a police report and obtains a case number. They report the incident to the Canadian Anti-Fraud Centre for a federal file number. And then we draft a detailed memo that quantifies the losses and makes the legal case for claiming them.
The framework Mahad uses in every audit defense comes down to two principles:
The rule of law says the taxpayer has an obligation to report everything. The spirit of the law recognizes that when a platform collapses and the taxpayer has done everything in their power to correct the record, it is not fair to penalize them for someone else's failure.
“It's not what you have. It's how you use what you have.”
Mahad told Bitcoin.com that he has never lost a single audit case across Canada, the US, the UK, Ireland, and Australia. That's not a marketing line. It's a track record built on knowing both sides of the table, having sat in the auditor's chair at CRA before building Block3 Finance.
Seven Years of Free Audit Defense: An Offer Nobody Else Makes
During the interview, Mahad shared something that visibly surprised the Bitcoin.com host. Every crypto tax report Block3 Finance produces comes with a guarantee:
“If you pay me $100 for your crypto report today, three years from now you get audited, we will go and defend it to the government and we're not going to invoice you again.”
That's seven years of free audit defense on any report we produce. If a government agency comes asking questions about the work we did for you, we handle it at no additional cost. No hourly fees, no surprise invoices, no fine print.
Mahad challenged anyone listening to find another firm that offers this. His words were simple:
“Go find another accountant that will tell you that they're not going to invoice you again. Please, there isn't one.”
Polymarket, DeFi, and the Reporting Mess Nobody Else Wants to Touch
The conversation shifted into one of the most complex areas of crypto taxation: DeFi, NFTs, and prediction markets. Mahad didn't shy away from calling it what it is.
“DeFi and NFTs are hard to report because there's no standardized reporting, complex transaction flows, software limitations, and multiple events inside one action.”
Most accountants stay away from this entirely. Most tax software can't handle it properly. And CRA doesn't accept software-generated summaries anyway. They want the raw data.
At Block3 Finance, we've developed processes specifically for this. We can produce a complete crypto tax report for 1,000+ DeFi transactions in as little as two hours.
Mahad also dropped a fact that caught many Canadians off guard: Polymarket winnings are taxable in Canada. If you walk into a convenience store and win $10 million on a lottery ticket, there's no tax. But if you predict the US election on Polymarket and win $10 million, it's fully taxable. The difference? You didn't buy a lottery ticket with Canadian dollars. You transacted in crypto, and that crypto transaction creates the taxable event.
“I was busy trying to educate people why Polymarket winnings are taxable because they're not buying with their Canadian dollars. They're buying with crypto and crypto is a transaction.”
This is why Mahad strongly advises anyone active in DeFi, NFTs, or prediction markets to operate through a corporation. It provides cleaner reporting, the ability to deduct expenses, separation from personal liability, and a far stronger position if an audit comes.
CARF 2027: The Deadline Nobody Is Preparing For
Perhaps the most forward-looking moment of the entire interview was Mahad's warning about CARF, the Crypto Asset Reporting Framework, which takes effect in 2027.
Under CARF, countries around the world have signed agreements to share crypto-related financial data across borders. If you hold wallets or exchange accounts in South Africa, Singapore, the UAE, or virtually any other participating country, your home tax authority will have access to that information.
“Nobody's talking about it except for Block3 Finance right now. What are you doing about it?”
This is not a hypothetical. We are already in 2026. The framework goes live next year. Combined with AI-driven audit tools and increasingly sophisticated on-chain analysis, the landscape for crypto compliance is shifting permanently.
Mahad's advice is straightforward: the time to structure properly, clean up your records, and get on the right side of the law is now. Not after the next bull run. Not after you get the audit letter. Now.
What Happens to Your Crypto When You Die?
The interview closed on a topic most crypto users never think about until it's too late: estate planning.
“What legacy are you leaving for your family? How is your wife or your husband going to get access to those wallets, all these things that you worked so hard for?”
Mahad has personally dealt with cases where crypto holders passed away and their families had no idea how to access the wallets, didn't know the seed phrases, and couldn't recover anything. Everything those individuals built was effectively lost.
His advice is simple and affordable:
Create a proper will, which can cost as little as $75 to $100. Tell your spouse or executor that you hold crypto. Document every wallet address, seed phrase, and hardware device location. If possible, hold crypto inside a corporation, which survives the owner's death.
“There will always be a bull market. That's one thing I love about crypto. What are you leaving for your family?”
Inside a corporation, the assets remain protected regardless of what happens to any individual. The surviving family steps in and operations continue. No probate. No scrambling for seed phrases. No lost wealth.
“Death and taxes are both guaranteed. It's just a matter of when, not if.”
Mahad covered far more than we could fit into a single article. The full Bitcoin.com interview goes deeper into automated trading risks, how CRA and IRS use old laws to classify modern crypto activity, why most of Canada's 700,000+ accountants still don't understand crypto, and much more. We highly recommend watching the full episode.
Free 30-Minute Consultation for Bitcoin.com Viewers
As a thank you to the Bitcoin.com community, we are offering a free 30-minute consultation for anyone who watched or listened to the interview. Simply mention "Bitcoin.com" when you reach out and we'll answer every question you have.
Whether you need help with tax filing, audit defense, corporate structuring, DeFi reporting, or just want to understand where you stand, Block3 Finance has been doing this since 2011. With 44 dedicated accountants, an undefeated audit record across five countries, and a seven-year defense guarantee on every report we produce, we're here to make sure that what you make is what you keep.