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More Canadian companies are starting to explore Bitcoin as part of their treasury strategy. Whether it’s a hedge against inflation, a long-term store of value, or a reflection of crypto-native values, Bitcoin is increasingly viewed not just as a speculative asset—but as a strategic one.
But how does this work from a legal standpoint? Can a Canadian corporation hold Bitcoin? What risks need to be managed, and how should the structure be set up?
In this post, we’ll walk through the key legal and strategic considerations for private Canadian businesses looking to put Bitcoin on their balance sheet—and how Wires Law can help.
Why Hold Bitcoin in Your Treasury?
Globally, high-profile companies like MicroStrategy and Tesla have brought attention to the idea of corporate Bitcoin holdings. That trend seems to be growing in 2025, with other public companies like Game Stop, Block, Inc., and Metaplanet adding a Bitcoin strategy as well.
The main reason companies are adopting Bitcoin on their balance sheet appears to be the same reason given by Tesla. Tesla disclosed in its March 2021 financial filings that it invested US $1.5 billion in Bitcoin “to diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity”. Some see it as a hedge against inflation and fiat debasement (i.e. money printing). Canadian founders—especially in tech—are taking note. In my own practice, I am coming across more entities either considering, or that have already made small allocations to Bitcoin.
Is It Legal for a Canadian Company to Hold Bitcoin?
There is currently (at the time of writing) no law in Canada that prohibits a business from holding Bitcoin as a corporate asset. But legality isn’t the only concern—fiduciary duties, risk management, and tax treatment all need to be considered.
Corporate directors must act prudently and in the best interests of the corporation. That includes documenting the rationale behind the decision to hold Bitcoin and ensuring adequate controls are in place.
They must also not act contrary to the reasonable expectations of shareholders under governing corporate legislation and common law principles related to shareholder oppression. In some situations, where shareholders had a reasonable expectation that excess cash or their investment dollars would not be allocated to Bitcoin, such shareholders may have oppression remedy claims.
Shareholder expectations on the topic may also be set out in a company’s shareholder agreement and by-laws. So, the board should also review existing corporate documents and consider whether there are any restrictions on the power of the board to make an allocation to Bitcoin.
Key Legal Considerations
Assuming that holding Bitcoin is lawful and does not breach any obligations owed by directors to the company’s shareholders, here are some key legal considerations for a Canadian company contemplating the addition of Bitcoin to its balance sheet.
1. Governance & Board Resolutions
Before acquiring Bitcoin, the board should pass a formal resolution. The resolution should include:
- Approval of the purchase strategy.
- Designation of individuals authorized to manage crypto wallets ou outline the plan for custody.
- Thresholds or limits for buying, selling, or transferring Bitcoin.
- Internal control protocols (e.g. multi-sig access etc.).
2. Fiduciary Duties & Risk Disclosure
Directors must act with due care, diligence, and loyalty. That means:
- Understanding Bitcoin’s volatility and risks.
- Reviewing risk mitigation options.
- Documenting board discussions and rationale.
3. Custody & Security
Bitcoin is bearer-like—if you lose it, it’s gone. So, proper custody is critical and can be challenging for private companies. If a sole director held the Bitcoin private keys, what happens if they die, suffer a disability or lose the keys? Aside from having a problem with shareholders, the company’s management may face negligence claims (among other types of claims). While that strategy may sound appealing for someone in snyc with the ethos of Bitcoin, the harsh reality is it presents its own risks, ones that shareholders may not permit.
For that reason, using regulated and authorized custodians, while presenting their own risks, may be more secure and may better protect the company and management from negligence claims in the event of loss. Custodians like Coinbase (who offer solutions marketed at companies — https://www.coinbase.com/en-ca/prime/custody) have their own legal processes for confirming what company representatives can access the Bitcoin and spend it or send it to a new wallet address. They also have the ability to setup multi-sig accounts, where spending above certain thresholds requires approval from 2 or more authorized representatives.
4. Insurance
Some insurers now offer crypto-specific coverage. It’s worth exploring whether (a) cold storage assets can be insured; (b) cyber liability policies extend to wallet security incidents; and (c) if using a custodian, what insurance coverage is in place. In fact, you should have your lawyer review the custody agreements and insurance policies in place to make sure you understand the risks related to having Bitcoin stored with that custodian.
5. Tax and Accounting
Bitcoin is not treated as currency in Canada. CRA treats it as a commodity, so:
- Capital gains or business income may apply depending on usage.
- Proper valuation and tracking of things like the cost basis are essential (and can be complex).
- Work closely with your tax advisors to ensure appropriate treatment.
The Canada Revenue Agency also requires additional disclosures if your corporation holds cryptocurrency in custody outside of Canada. Under Form T1135 (Foreign Income Verification Statement), corporations must report foreign property—including crypto held on foreign exchanges or in non-Canadian custodial wallets— in some situations and based on the value of the crypto. Failure to file this form and make the disclosure, when required, can result in significant penalties. Corporations should monitor holdings carefully and consult with their accountant to ensure compliance.
6. Securities Law
Generally, holding Bitcoin on your balance sheet does not trigger securities regulation. But marketing your Bitcoin holdings to investors, or raising capital tied to Bitcoin, may impose additional securities laws considerations.
How to Structure Your Bitcoin Holdings
Some companies opt to hold Bitcoin in the operating company, while others create a separate holding company to isolate risk. This decision can affect things like (a) liability exposure in the event of claims against the operating company; and (b) corporate governance complexity. There’s no one-size-fits-all approach to holding Bitcoin on the balance sheet for private companies and careful planning, tax and legal advice should be sought. The structure should reflect your risk profile and objectives.
Common Mistakes to Avoid
- Failing to document governance decisions
- Commingling personal and corporate crypto assets, for example, in a single wallet or on a single hardware wallet or account.
- Overlooking tax and accounting implications.
How Wires Law Can Help
Wires Law offers a tailored legal service for Canadian companies adopting a Bitcoin treasury strategy. We can assist with:
- Drafting board resolutions and treasury policies.
- Drafting by-laws and shareholder agreement provisions to cover the right to acquire Bitcoin and to set each shareholder’s reasonable expectation on the Bitcoin treasury policy.
- The shareholder agreement can also deal with dispute resolution and a process for adding and removing authorized individuals who can transact with the Bitcoin—whether via custodian, multi-sig wallet, or otherwise.
- Reviewing custody agreements.
- Advising on director liability and fiduciary risks.
- Structuring holdings between opco/holdco.
Wires Law has worked with tech founders, crypto companies, and early adopters of innovative finance tools. Our focus is on practical, risk-managed legal advice—not just theory.
Closing Thoughts
Bitcoin isn’t just for speculators anymore. As macroeconomic and geopolitical instability grows, more founders are exploring how to build a resilient treasury strategy—and Bitcoin, for some companies, has started to play a role.
But if you’re going to do it, do it right. Get the legal foundation in place, understand the risks, and move forward with confidence.
Want to learn more or explore whether a Bitcoin treasury strategy fits your business? Contact Wires Law today.
John Wires
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