Starting January 1, 2026, crypto users and exchanges across 48 jurisdictions, including the UK and European Union, will face the full impact of the OECD’s Crypto-Asset Reporting Framework (CARF). This global framework is designed to make crypto transactions more transparent for tax authorities and reshape compliance for digital asset businesses.
CARF requires crypto platforms to collect detailed customer information, verify tax residency, and report users’ balances and transactions annually to domestic tax authorities. These authorities will then share the data internationally under existing information-exchange agreements, making offshore or overseas crypto activity more visible than ever.
According to Lucy Frew, partner at Walkers law firm, CARF is a “game-changer” that will significantly affect both crypto businesses and customers. She notes that companies that adapt early will manage risk better and maintain trust, while those that delay may face both regulatory and reputational consequences.
What CARF Means for Crypto Exchanges
For crypto exchanges, CARF isn’t just a minor compliance update—it’s a structural shift. Platforms will need to integrate CARF requirements into existing Know Your Customer (KYC) and Anti-Money Laundering (AML) processes. This includes redesigning onboarding flows to capture tax-residency and self-certification data, and upgrading reporting systems to meet regulatory standards.
Exchanges may also need to implement new governance frameworks, train staff, and ensure close coordination between compliance, engineering, and customer support teams, especially for those operating across multiple jurisdictions.
Asher Tan, CEO of UK-licensed exchange CoinJar, explains that users will now be asked to provide additional tax-residency information. The challenge for platforms is to meet regulatory expectations while maintaining a clear, trustworthy, and user-friendly experience. For regulated exchanges, getting this balance right could become a competitive advantage as crypto trading moves further into mainstream finance.
What Crypto Users Should Expect
Retail crypto users won’t face new taxes under CARF, but audit risks are expected to rise. CARF makes existing tax rules enforceable by providing authorities with standardized, machine-readable data directly from exchanges, including foreign platforms.
This means tax authorities like the UK’s HMRC will more easily identify discrepancies between reported transactions and exchange data. Users should prepare for stricter onboarding processes and more frequent account reviews. Keeping accurate records and reporting transactions correctly will be crucial to avoid potential audits or penalties.
CARF represents a significant step toward global transparency in the crypto market, and both exchanges and users need to act now to stay compliant. Early adaptation can help crypto businesses maintain trust, and users can ensure their activities remain above board.
