UK Crypto Firms Face New Data Reporting Rules From 2026

Starting from January 1, 2026, the United Kingdom will implement stringent new regulations requiring all crypto firms to report detailed data on every customer transaction. This comprehensive data collection will include the full names, home addresses, and tax identification numbers of users. The new rules are part of the UK government's broader effort to enhance transparency and compliance within the crypto industry, aligning with the Organisation for Economic Co-operation and Development's (OECD) Cryptoasset Reporting Framework (CARF).

The data collection requirements are extensive. For individual users, firms must gather names, dates of birth, home addresses, countries of residence, National Insurance numbers or Unique Taxpayer References (for UK residents), and tax identification numbers (TINs) along with the issuing country (for non-UK residents). For entity users, companies must collect legal business names, main business addresses, registration numbers (for UK firms), and TINs and issuing countries (for non-UK firms). In some cases, platforms must also gather details of the company’s controlling persons. The transaction data that must be recorded and reported includes the value, type of cryptoassets, type of transaction, and the number of units.

The UK government has emphasized the importance of accurate and verified reporting. Firms are advised to start collecting this information earlier to ensure readiness when the new rules come into force. Failure to provide accurate, complete, or verified reports may result in penalties of up to £300 per user. The government will update guidance on how to carry out due diligence to verify the accuracy of the collected information.

The new regulations are expected to lead to the collection of a large volume of data. This move comes as the number of Britons buying cryptocurrencies has been increasing. The UK’s Financial Conduct Authority (FCA) is also considering restrictions on UK residents purchasing cryptocurrencies using credit, although authorized stablecoin purchases would be exempt. The regulator is currently seeking public feedback on this and other planned measures.

Currently, the FCA requires all crypto firms operating in the UK to register. Its oversight is limited to anti-money laundering rules, the financial promotions regime, and consumer protection laws. Despite the registration requirement, the FCA rejected 86% of crypto firm applications in the 12 months ending April 2024. However, the rejection rate has dropped to 75% in the current financial year.

The new regulations are a significant step towards greater transparency and compliance in the crypto industry. They aim to ensure that all crypto transactions are accurately reported and that users are held accountable for their activities. This move is likely to have a profound impact on the way crypto firms operate in the UK, as they will need to invest in robust systems to collect, verify, and report the required data. The penalties for non-compliance are substantial, underscoring the government's commitment to enforcing these new rules.