UK and Dozens Others To Enforce Strict Reporting Rules

Key Takeaways

• The U.K. and dozens of other countries have begun enforcing a new global crypto tax reporting regime under CARF.

• Exchanges must now collect users’ tax residency details and report crypto transactions to tax authorities.

• The rules aim to close loopholes around undeclared crypto gains and significantly reduce anonymity.

As governments tighten their grip on digital assets, 2026 is shaping up to be a turning point for crypto taxation worldwide.

With the new year underway, the U.K. has joined nearly 50 other countries in rolling out the Cryptoasset Reporting Framework (CARF)—a sweeping global initiative designed to bring crypto transactions under the same level of tax scrutiny as traditional financial assets.

For everyday crypto users, the message is clear: the era of flying under the tax radar is coming to an end.

CARF was developed by the Organisation for Economic Co-operation and Development (OECD) to address what tax authorities see as a growing blind spot: profits made through cryptocurrencies that often go unreported.

Under the framework, crypto exchanges and other service providers must collect detailed information about users, including their tax residency, and report annual transaction data to local tax authorities.

That data will then be shared internationally between participating countries.

The U.K. is among the first wave of adopters.

From 2026 onward, exchanges serving U.K. users will be required to gather the necessary data, with cross-border information sharing scheduled to begin in 2027.

In total, 75 countries have committed to implementing CARF.

While 48 jurisdictions—including many in Europe, parts of Asia, Africa, and South America—are moving ahead, others are following closely behind.

The United States is expected to implement the framework in 2028, with data exchanges beginning in 2029.

The initiative builds on the existing Common Reporting Standard (CRS), which is used for traditional financial accounts; however, CARF expands the scope to explicitly cover crypto assets.

That includes cryptocurrencies, stablecoins, NFTs, and certain DeFi arrangements where intermediaries are involved

Individuals in participating jurisdictions, especially high-net-worth traders, will face greater scrutiny.

Unreported gains could lead to audits, back taxes, interest, and penalties.

For example, the U.K. capital gains tax on crypto, which can reach up to 20%, will be easier to enforce with direct data feeds.

The new law enforces mandatory KYC and data sharing, which may deter privacy-focused users, prompting some to adopt DeFi or self-custody wallets.

However, these aren’t fully exempt if intermediaries are involved.

Governments expect to recover billions in lost revenue. The U.K.’s move alone targets evasion estimated at £500 million annually.

Initial enforcement could trigger sell-offs as users realize gains to comply, but long-term stability may follow as crypto integrates with traditional finance.

The framework promotes global cooperation, but highlights that non-participants, such as Russia or China, could become tax havens, although FATF pressures may limit this.

Exchanges and crypto service providers will feel the immediate weight of compliance.

CARF requires platforms to implement robust systems for verifying user identities, determining tax residency, and reporting detailed transaction histories.

That comes with high operational costs, which may be passed on to users through higher fees.

Smaller exchanges may struggle to keep up, potentially accelerating industry consolidation.

At the same time, platforms that adapt early—particularly in jurisdictions like the U.K.—may gain a competitive advantage by signaling regulatory readiness and trustworthiness.

While CARF focuses primarily on centralized intermediaries, it could indirectly fuel growth in parts of DeFi that operate without custodial middlemen.

Regulators, however, have already signaled that future updates may also attempt to close those gaps.

Reactions across the crypto community remain divided.

Some see CARF as an unavoidable step toward mainstream adoption, arguing that clear tax rules will make institutions more comfortable entering the space.

Others view it as a blow to crypto’s original promise of pseudonymity.

What is clear is that CARF marks a shift in how governments approach digital assets—not as a fringe experiment, but as a mature financial sector subject to global coordination.

As 2026 unfolds, crypto users and platforms alike will have to adapt to a reality where tax authorities are no longer playing catch-up—but watching closely.

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