UK Adopts CARF: Crypto Firms Face 2026 Data Reporting Deadline

The UK government has announced significant changes to its crypto tax regulations, set to take effect in 2026. Under the new rules, crypto service providers will be required to collect and report user data in accordance with the OECD’s Crypto-Asset Reporting Framework (CARF). This global initiative aims to enhance tax transparency and curb evasion in the digital asset space.

The adoption of CARF by the UK aligns it with over 40 countries, including all EU member states. The new regulations will have far-reaching implications for both centralized and decentralized crypto platforms. Starting in 2026, UK-based and foreign crypto service providers (CASPs) must begin collecting user identity and transaction data. The first deadline for annual reporting is set for May 31, 2027, covering transactions from January 1 to December 31, 2026, and will continue annually thereafter.

CASPs will be required to report on all UK tax residents and users from countries implementing CARF rules. The data to be collected includes user identity details and transaction information, such as volumes, timestamps, and counterparties. This applies to exchanges, custodial wallets, and transfer service providers. Non-compliance with CARF can result in fines of up to €300 per user, as well as penalties for late, inaccurate, or missing filings. CASPs are advised to start building their reporting infrastructure now to avoid future penalties.

The new rules are expected to pose challenges for decentralized exchanges (DEXs) and non-custodial wallets, which prioritize user privacy and flexibility. These platforms may struggle to align with CARF requirements, and there are already rumors of some firms considering an exit from the UK due to the high cost of compliance. The industry is closely watching for additional guidance from the UK government on how to navigate these changes.

The UK’s adoption of CARF marks a new era of regulation in the crypto space. While the goal is to increase security and transparency, it may come at the cost of privacy and decentralization—values many in the crypto community hold dear. Crypto businesses must now adapt, prepare, or relocate as 2026 approaches. The EU’s DAC8 rules will work in tandem with CARF, requiring EU-focused crypto firms to follow strict transparency measures as well.