Starting January 1, 2026, all cryptoasset service providers operating in the UK must report detailed data on users and transactions. This applies to both domestic and foreign firms.
The move is part of the UK’s adoption of the Cryptoasset Reporting Framework (CARF). It is a global standard developed by the Organisation for Economic Co-operation and Development (OECD). It signals a major shift in how the government plans to monitor digital assets—more scrutiny, more structure, and hefty penalties for non-compliance.
What Crypto Firms Need to Know
Under the new rules, crypto platforms must identify every user and store their legal name, address, and tax identification number. This applies not only to UK-based users but also to those in any other CARF-participating country. Firms must also record transaction-level data, including the asset type, quantity, value, and nature of each trade or transfer.
Even foreign exchanges serving UK clients won’t be off the hook. They, too, will be expected to comply or risk facing fines. And those fines are no joke. Incorrect or missing data could cost firms up to £300 per user. That adds up quickly for platforms serving tens of thousands—or even millions—of users.
The UK tax authority has announced that, starting from January 1, 2026, crypto asset companies operating in the UK must comprehensively report user and transaction data, including user identity, address, tax identification number, and details of each transaction, in compliance…
— Wu Blockchain (@WuBlockchain) May 17, 2025
Although enforcement doesn’t begin until 2026, HM Revenue & Customs (HMRC) is urging firms to start gathering data now. Early compliance preparation can help avoid operational headaches later, especially for platforms that haven’t prioritized Know Your Customer (KYC) and reporting systems.
A Different Path from the EU
While the European Union’s MiCA (Markets in Crypto-Assets) regulation also pushes for tighter control of digital assets, the UK’s CARF-based approach is more globally aligned and focused specifically on tax transparency. This mirrors broader international trends. For example, the U.S. has already updated its tax code to include digital assets, and South Korea plans to enforce its own reporting rules in 2025.
Real-world cases like the 2023 U.S. crackdown on Binance and Coinbase show what happens when regulators believe user data is missing or misused. The UK isn’t waiting for a scandal—it’s acting early.
Disclaimer
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