tl;dr
From January 1, 2026, UK-based crypto-asset service providers, including exchanges, brokers, and dealers, must collect detailed user and transaction data under the Crypto-Asset Reporting Framework (CARF). This global initiative aims to combat tax evasion by facilitating information exchange between ...
Starting January 1, 2026, UK-based crypto-asset service providers, including exchanges, brokers, and dealers, must comply with the new Crypto-Asset Reporting Framework (CARF) designed to combat tax evasion by collecting detailed user and transaction data.
This global initiative encourages information exchange between countries to address risks associated with digital asset tax evasion. Under CARF, providers must gather personal details for individual users—such as names, dates of birth, addresses, and country of residence—and business information for entities, including company names and addresses.
Transaction details are equally important. Firms must record the type of crypto asset involved, transaction nature, value, and number of units transacted for users based in the UK or other participating countries.
The HM Revenue and Customs (HMRC) has set strict penalties for non-compliance; providers face fines up to £300 per user for inaccurate, incomplete, or unverified reporting. This policy mandates extensive data collection by all UK-based reporting crypto-asset service providers (RCASPs) to ensure transparency and accountability in crypto transactions.
By adopting CARF, the UK aligns itself with the Organisation for Economic Co-operation and Development (OECD) standards and extends regulation to domestic reporting, reinforcing efforts to curb tax evasion through digital assets.
Crypto firms are urged to verify the accuracy of all collected data diligently, as the new framework imposes substantial responsibility on them to support tax authorities effectively.