Canada taxes crypto as business income (100%) or a capital gain (50%) — no in-between.

Commonly misreported
It depends on your activity, not a simple election. CRA guidance says your crypto income is business income when your pattern of buying and selling is consistent with 'carrying on a business' — frequent trading, short holding periods, market expertise, or financing purchases with debt are the tell-tale factors. Otherwise it is capital in nature: only half of a capital gain is taxable, but business income is fully taxable (and fully deductible if it's a loss).

Commonly misreported
Yes. CRA treats a trade or exchange of one crypto-asset for another as a disposition, the same as selling for cash — you must calculate a gain or loss using the fair market value of what you received, even though no Canadian dollars changed hands. Transferring crypto between wallets you own, by contrast, is not a disposition.

Rewards from proof-of-work mining or proof-of-stake validation are generally included in income at the time you receive them — as business income if mining is carried on as a business, and staking rewards from a centralized exchange are income at the moment they're credited to your wallet. Mining equipment such as ASIC or GPU rigs used in a mining business may qualify for capital cost allowance under CCA class 50.

You use the crypto-asset's fair market value in Canadian dollars at the time of each transaction — generally the price a willing, informed buyer and seller would agree to in an open market. CRA requires a reasonable, consistent valuation method (for example, a specific exchange's rate) used every year, with a record of how it was calculated.

CRA requires records of the type and number of units for each transaction, the date, the Canadian-dollar value at the time, a description of the transaction and counterparty (even just a wallet address), and your wallet balances at year start and end — kept for at least six years from the end of the relevant tax year.

Not really. CRA's published crypto-asset guide covers dispositions, valuation, record-keeping, mining/staking, and GST/HST, but lists no dedicated page for DeFi activity like lending, liquidity pools, or yield farming. Until that gap is filled, the general disposition and business-vs-capital rules above are what you have to apply to DeFi — and documentation matters even more.