UK and 47 countries to impose CARF rules. Credit: olia danilevich. Key Takeaways The U.K. and dozens of other countries have begun enforcing a new global crypto tax reporting regime under CARF. Exchanges must now collect users’ tax residency details and report crypto transactions to tax authorities. The rules aim to close loopholes around undeclared crypto gains and significantly reduce anonymity. As governments tighten their grip on digital assets, 2026 is shaping up to be a turning point for c ...

Two bipartisan US House lawmakers have released a discussion draft that would carve out a limited tax safe harbor for stablecoin payments, marking one of the most concrete attempts yet to align crypto taxation with everyday consumer use. Key Takeaways: The draft would exempt small stablecoin payments under $200 from capital gains tax. Staking and mining rewards could be taxed after a five-year deferral instead of immediately. The proposal targets consumer use, not crypto investment or trading activit ...

Core Viewpoint - France's National Assembly has adopted a wealth tax amendment targeting cryptocurrency holdings, which may hinder innovation and drive talent abroad [1][4]. Group 1: Tax Amendment Details - Amendment No. I-3379 to France's 2026 Finance Bill was passed with a narrow vote of 163-150, adding digital assets to a new "unproductive wealth" tax base alongside gold, yachts, and classic cars [2]. - The amendment imposes a flat 1% annual tax on net wealth exceeding $2.2 million (€2 million), increasing from the previous threshold of $1.49 million (€1.3 million) [2]. Group 2: Implications for Cryptocurrency - The bill does not provide exemptions for cryptocurrency, unlike certain long-term rental properties, complicating tax treatment for crypto founders and builders [3]. - The lack of nuanced definitions in the amendment could lead to oversimplification of the crypto landscape, failing to differentiate between passive investors and ecosystem builders [4]. Group 3: Concerns from Industry Experts - Experts warn that the new tax structure could inadvertently penalize productive capital and technological progress in France's digital economy [4]. - The proposal replaces the previous 30% sale-only crypto tax with an annual wealth levy on holdings, taxing coins regardless of whether they are sold [5]. - There is a risk of economic injustice in taxing early token-holders who contribute to ecosystem-building, creating disincentives for long-term alignment [5]. Group 4: Tax Structuring Risks - The amendment lacks clear definitions distinguishing between occasional and professional traders, which could lead to tax-structuring risks for token-based business models [6][7]. - The determination of trader classification would be case-by-case, based on volume, frequency, and proportion of crypto income, leaving uncertainty until further guidance is provided [7].

Core Insights - The IRS is currently unprepared to handle the volume of tax reporting that will arise from cryptocurrency transactions, particularly from exchanges like Coinbase [1][2] - The discussion highlights the need for clear tax regulations for digital assets, as the current tax code lacks straightforward answers for various transactions [3] Group 1: IRS Preparedness - Lawrence Zlatkin, Coinbase's tax executive, stated that the IRS may struggle to manage the vast amount of information from Coinbase alone, emphasizing the need for administrability in future regulations [2] - The IRS has recently introduced crypto brokerage forms, which are expected to overwhelm federal tax offices, raising concerns about the agency's capacity to process this data [2] Group 2: Legislative Uncertainty - Key taxation questions remain unresolved, such as the "de minimis" exemption for minor gains and the taxability of staking gains, which are central to ongoing congressional discussions [2] - There is significant uncertainty for crypto businesses and investors regarding which tax issues will be prioritized by Congress and when [2] Group 3: Tax Code Clarity - Senator Mike Crapo highlighted the lack of clear tax rules for various digital asset transactions, leaving taxpayers with many unanswered questions [3] - The panel's discussions also touched on the perceived avoidance of U.S. taxes by the crypto industry and the influence of crypto lobbyists seeking favorable tax treatment [3]

Regulatory Landscape - US Senate schedules hearing on crypto taxation [1] Company Focus - Coinbase executive to provide testimony at the hearing [1]

Core Viewpoint - The IRS has significantly expanded its crypto surveillance capabilities since 2017, moving from targeted investigations of individual traders to broader requests for user records from major exchanges and crypto companies [1][2]. Group 1: IRS Surveillance Expansion - The IRS has transitioned from focusing on specific transaction thresholds to a more comprehensive approach aimed at identifying tax non-compliance across multiple crypto exchanges [2]. - Major exchanges such as Coinbase, Kraken, Poloniex, and Circle were initially targeted, but the enforcement has since broadened across the sector [2]. Group 2: Enforcement Actions and Results - In fiscal year 2021, the IRS generated $3.5 billion in crypto seizures, which accounted for 93% of the agency's total asset seizures that year [3]. - The IRS secured court approval for John Doe summonses targeting users of Kraken, Circle, and Poloniex who transacted $20,000 or more during specified periods [4]. Group 3: Ongoing Investigations - By June 2023, the IRS had opened 216 examinations and sent nearly 15,000 "soft letters" to crypto users identified through exchange data [5]. - The IRS must meet three legal thresholds to obtain John Doe summonses, which include demonstrating an ascertainable group of persons, establishing a reasonable basis for believing noncompliance, and proving that information is not readily available from other sources [6].