Executive summary: Key legal and evidentiary issues

• Jeanette Amicarelli claimed a C$473,241.74 non-capital loss in her 2017 taxation year arising from Bitcoin purchased through the cryptocurrency exchange QuadrigaCX, whose account balance suddenly fell to nil in late December 2017.

• The Minister of National Revenue denied the disputed loss in full, questioning whether the Appellant actually incurred the financial loss and whether any such loss was on account of income or capital.

• Credibility of the Appellant's pre-loss conduct was accepted by the Court, though her post-loss behaviour — including failing to file a proof of claim, not calling the police, and not preserving correspondence — was characterized as eccentric.

• Classification of the Appellant's Bitcoin activities as an "adventure or concern in the nature of trade" under s. 248(1) of the Income Tax Act was central, requiring analysis of intention, actual conduct, nature of the property, and financing methods.

• Admissibility and weight of the Ontario Securities Commission Report on QuadrigaCX's fraud and collapse were considered under the public documents exception to hearsay, with the Court accepting it to confirm general circumstances but not all granular details.

• On a balance of probabilities, the Court found the loss was more likely than not caused by malfeasance by QuadrigaCX and/or its CEO Gerald Cotten, and that the Appellant's activities constituted a business, entitling her to the non-capital loss.

Background and the parties

Jeanette Amicarelli, an individual resident in Mississauga, Ontario, was employed full-time by Air Canada and was on secondment to Unifor Local 2002 during the 2017 taxation year. She first heard about Bitcoin from friends and family in 2016 and testified that she knew people who had made hundreds of thousands of dollars from investing in Bitcoin. Motivated by the rapid appreciation of Bitcoin and hoping to retire in her early sixties, Amicarelli opened an account with QuadrigaCX, a Canadian cryptocurrency exchange, in 2017 and began purchasing Bitcoin with the aim of making a profit.

Funding the Bitcoin acquisitions

To finance her Bitcoin purchases, the Appellant deployed a combination of personal savings and borrowed funds. She withdrew all of the funds in her registered retirement savings plan (RRSP), which was costly insofar as there would be an acceleration of tax and a loss of contribution room. She obtained a second mortgage on her home at an 11.99% interest rate and took advances from her credit cards, which charged annual interest rates over 20%. The Court noted that only a person with a bona fide belief that they were going to enjoy positive financial outcomes would engage in such costly financing. The Appellant testified that she made more than 100 Bitcoin purchases through her QuadrigaCX account, logged in and viewed her account daily, usually using her work laptop, and spent several hours per week contemplating buys and completing transactions — activities the Court found were more than dabbling and were more akin to activities of a trader or dealer.

The disappearance of the account balance

In late December 2017, the Appellant's QuadrigaCX account balance suddenly fell to nil. She reached out to her work friend, Ms. Campanaro, for help setting up an appointment with their information technology service provider and sent electronic mail to QuadrigaCX, though those messages were not preserved. The Appellant did not retain a printed record of the nil balance, notwithstanding her usual practice of printing other account statements. She testified that she felt ashamed after the loss and did not mention it to anyone for many months, although she finally confided in one son in August 2018. She also testified that she was grief-stricken as of late 2017 and that a doctor recommended she seek counselling. In February 2018, in an effort to see if she could somehow revive her account, the Appellant twice funded her account with C$1,000, but that strategy did not work. She also consulted with a computer recovery expert about strategies to salvage her account but was unable to afford it. When QuadrigaCX filed for creditor protection, the Appellant did not file a proof of claim, and she did not call the police at any point.

The QuadrigaCX scandal and the OSC report

QuadrigaCX ceased operations in early 2019, following a widely publicised scandal involving the platform. The Ontario Securities Commission released a report concluding that the collapse of QuadrigaCX was attributable to fraud and mismanagement. The parties filed a copy of the OSC Report with their partial statement of agreed facts and at the hearing agreed that any factual allegations in it are true. The Court accepted that the co-founder and CEO of QuadrigaCX, Gerald Cotten, was most likely a fraudster who misused client assets. The Court also accepted that by early 2018, QuadrigaCX clients went public with stories of missing funds and significant transactional delays. The OSC Report was admitted under the public documents exception to the prohibition on hearsay, though the Court noted the report's own caveat that its findings and views are not findings of fact by an OSC hearing panel and have not been tested before the OSC tribunal or a court. Accordingly, the Court accepted portions but not all of the OSC Report.

Whether a financial loss was actually incurred

The first issue had two factual components: whether the Appellant expended the claimed amount to acquire Bitcoin in 2017, and whether her Bitcoin was then lost or stolen. The Court found the Appellant's pattern of funding Bitcoin acquisitions aligned with the amounts she says she invested, and there was no evidence to suggest that the Appellant made any use of the substantial funds that she accessed other than to buy Bitcoin. The Court accepted as fact that the Appellant incurred expenses of C$473,241.74 in 2017 associated with buying Bitcoin on the QuadrigaCX platform. On the question of theft, the Court found that while the precise circumstances were not free from doubt, it was more likely than not that she sustained the loss she says she suffered, probably due to malfeasance by QuadrigaCX and/or Cotten.

Whether the loss was on income or capital account

The critical legal question was whether the loss was a capital or non-capital loss. There are no specific provisions in the Income Tax Act governing the tax treatment of losses due to theft or fraud, so the Court applied the "adventure or concern in the nature of trade" principles from the Supreme Court of Canada's majority reasons in Friesen v Canada and related Interpretation Bulletins. Analyzing the five established factors — the Appellant's intention, actual conduct, connection to her business or profession, the nature of the property, and financing and holding period — the Court concluded that the Appellant's activities fell within the definition of business in s. 248(1). The Court noted that Bitcoin does not pay interest, dividends or distributions, and there was no evidence of any personal use or benefit. Any source argument based on personal use had to fail; if the Appellant expended at least C$473,241.74, the only workable theory was that she did it to achieve a profit or gain. The Court also emphasized that to the extent that material profits earned in a market frenzy are fully taxable regardless of the risk profile of the market, losses, including catastrophic losses, must be given symmetrical treatment.

The ruling and outcome

The Tax Court of Canada, per the Honourable Justice John A. Sorensen, allowed the appeal with costs in favour of the Appellant, Jeanette Amicarelli, by judgment signed December 9, 2025. The matter was referred back to the Minister of National Revenue for reconsideration and reassessment on the basis that the Appellant is entitled to a C$473,241.74 non-capital loss in her 2017 taxation year. The judgment does not specify an exact monetary amount of tax relief flowing from the recognized non-capital loss; rather, the entitlement was expressed as the recognition of the loss itself, with the reassessment to be carried out by the Minister accordingly.