UK Imposes £300 Fines on Non-Compliant Crypto Traders Starting January

The UK government is set to impose stricter regulations on cryptocurrency traders starting in January. Non-compliant traders will face fines of up to £300 for failing to share personal details with trading platforms. This move is part of the Cryptoasset Reporting Framework, which aims to close loopholes and capture unpaid capital gains, with an expected revenue generation of £315 million by April 2030. The new rules require users to provide identifying information to exchanges and platforms, targeting both individual holders and non-compliant service providers.

Exchequer Secretary James Murray MP emphasized that these rules are designed to "crack down on tax dodgers as we close the tax gap." The comprehensive reporting will ensure that tax evaders have nowhere to hide, generating revenue for essential public services such as healthcare and law enforcement. The new framework is part of broader government efforts to increase tax compliance across digital asset transactions, addressing the limited enforcement of current UK tax rules that require cryptocurrency holders to pay capital gains tax on profits.

The timing of these measures coincides with Chancellor Rachel Reeves’s stance on fiscal responsibility, as she has refused to rule out future tax increases following recent welfare reform reversals. Reeves defended the government’s approach, stating, “I’m not going to apologise for making sure the numbers add up.” The tax compliance measures are complemented by the UK’s broader cryptocurrency regulatory framework, with draft legislation published in April 2025. This legislation brings crypto exchanges, dealers, and stablecoin issuers under traditional financial services oversight.

The UK’s regulatory approach aligns more closely with the United States than the EU’s Markets in Cryptoassets Regulation. UK authorities are extending existing financial regulations to crypto firms through phased implementation, expected to be complete by 2026. The first phase focuses on stablecoins, while the second phase will expand to broader cryptoasset categories and activities. Key rules and requirements are already being implemented throughout 2025.

Cryptocurrency service providers will need to implement customer data collection systems and regular reporting procedures to avoid penalties. The compliance burden may increase operational costs for smaller exchanges and trading platforms. Users trading on non-compliant platforms or failing to provide required documentation face direct financial penalties. The £300 fine structure creates clear incentives for voluntary compliance while generating revenue from non-compliant actors.

Chancellor Reeves acknowledged that recent policy reversals have been “damaging” but maintained that fiscal responsibility requires comprehensive tax collection. The new regulations are part of a broader effort to bring digital assets under traditional financial oversight, ensuring that the UK’s cryptocurrency market operates within a framework that promotes transparency and compliance.