The UK government is strengthening compliance requirements for crypto firms by expanding regulatory oversight. In newly issued guidelines aimed at improving tax transparency, UK-based crypto firms must now collect user details, including transaction data, under the Crypto-Asset Reporting Framework (CARF). Originally introduced by the Paris-based Organisation for Economic Co-operation and Development (OECD) in October 2023, the CARF legislation is set to be adopted by the UK ahead of broader cryptocurrency sector regulations planned for 2026.
Crypto Firms Required to Gather User Information
According to the new directive, crypto firms in the UK must collect key personal details from retail users, including their name, date of birth, and home address. Additional information such as country of residence, National Insurance number, and Unique Taxpayer Reference must also be recorded for crypto purchasers and holders.
For business users, crypto firms must record essential details such as legal business names, primary business addresses, and company registration numbers, in line with the new guidelines.
“Depending on the information collected, firms may need to submit annual reports to His Majesty’s Revenue and Customs (HMRC),” the announcement stated.
Additionally, crypto firms must log transaction data, including the value of funds and the specific type of cryptocurrency used, as part of compliance measures.
Crypto firms must ensure the accuracy of collected user data through due diligence, with further guidance on verification to be provided in the future, according to the latest announcement.
UK authorities have warned that companies failing to comply with these regulations may face fines of up to GBP 300 per user. Businesses must align their operations with the Crypto-Asset Reporting Framework (CARF) by January 1, 2026.
The UK continues to advance its role in global cryptocurrency regulation, with the Financial Conduct Authority (FCA) working toward finalizing a national crypto law by 2026. Meanwhile, the Bank of England’s (BoE) Prudential Regulation Authority has directed domestic corporations to disclose their crypto asset exposure.
Additionally, the BoE has partnered with the New York Department of Financial Services (DFS) to facilitate knowledge exchange among senior officials specializing in digital assets and emerging payment sectors.
Recent developments include FCA approvals granted to US-based Coinbase and Austria’s BitPanda, allowing them to operate legally in the UK. Despite these regulatory advancements, the UK Treasury has clarified that there are no plans to establish a national crypto reserve similar to the US model.
