Say goodbye to the anonymous era! The UK implements a crypto tax framework, revealing the identities of exchanges and wallet users

The UK officially launches CARF, requiring crypto platforms to collect transaction and identity data and automatically report taxes. Cross-border data exchange is now online, marking the end of the anonymous crypto investment era.

UK Officially Launches CARF, Incorporating Crypto Assets into Automatic Reporting System

According to the Financial Times, the UK has officially implemented the “Cryptoasset Reporting Framework” (CARF) developed by the OECD starting this week, becoming one of the earliest countries worldwide to fully enforce this system. The new regulations, effective from January 1, require crypto trading platforms and related service providers within the UK to begin collecting complete user transaction and identity data and report to HM Revenue & Customs.

The core goal of this system is to make the tax transparency of crypto assets comparable to traditional financial accounts, ending the long-standing perception of cross-border digital asset income as “difficult to trace.” The UK is also among the first 48 countries to implement CARF, symbolizing that major economies no longer view crypto assets as a gray area.

Exchanges and Wallet Providers Obligated to Fully Disclose User Identities

Under the new regulations, crypto asset service providers must collect and retain data such as users’ names, date of birth, addresses, tax residency, and tax identification numbers, as well as detailed records of purchase prices, sale amounts, gains and losses, and transfer records. Regardless of whether users are UK residents, all transactions through UK platforms must be documented.

UK tax authorities state that data collection will commence immediately, with the first official reporting expected to be completed by May 2027, including a retrospective review of all transactions in 2026.

In the future, this information will also be exchanged automatically with other participating countries through the OECD mechanism, establishing a cross-national tax supervision network. If users provide false or incomplete data, they could face fines of up to £300, and deliberate tax evasion may result in tax recovery and increased penalties.

Long-term Non-Reporting Issues Surface, UK Accelerates Regulatory Gaps Closure

The UK’s focus on crypto asset taxation has not emerged overnight. In recent years, regulators have repeatedly warned that the rate of misreporting crypto investments is high, especially among younger demographics, where digital assets are gradually replacing stocks as the main investment target. Although the UK already has tax rules in place, the lack of automated data sources limited enforcement effectiveness.

To address this, the UK and the US established a joint task force in September 2025 to strengthen anti-money laundering and cross-border supervision cooperation, while also pushing for stricter regulation of crypto businesses within the financial oversight framework. The implementation of CARF is a key piece of this policy puzzle, enabling tax authorities to gain a complete view of digital asset flows.

Global Rollout, Anonymous Crypto Investments Gradually Become History

Currently, about 75 countries have committed to adopting CARF, including major financial centers such as Singapore, Switzerland, Hong Kong, and the United Arab Emirates, with plans to join the reporting and data exchange network later this decade. The US has also scheduled implementation for 2028, with the first international data sharing set to begin in 2029.

UK tax experts note that this signifies “the end of the era of anonymous crypto asset investments,” and that future crypto transactions will be as transparent for tax purposes as bank accounts. As the global reporting network gradually takes shape, crypto asset holders will need to reassess compliance risks, marking a new phase of full institutionalization and regulation in the crypto market.