Core Insights - A global crackdown on crypto tax evasion has commenced, with the UK and 47 other countries implementing mandatory transaction reporting for digital assets under new OECD rules [1][2][3] - The Cryptoasset Reporting Framework (CARF) will see automatic data sharing among tax authorities starting in 2027, affecting numerous jurisdictions including all EU countries and major crypto hubs [2][3] Group 1: Regulatory Changes - Major crypto exchanges are now required to collect comprehensive transaction records for UK customers, including purchase prices, sale amounts, and profits, while reporting users' tax residency to HM Revenue & Customs [1] - Seventy-five countries have committed to implementing CARF rules, with enforcement beginning in 2027 for crypto hubs like the UAE, Hong Kong, Singapore, and Switzerland [3] - The United States plans to implement the CARF framework in 2028, with information exchanges starting in 2029 [3] Group 2: Enforcement and Compliance - HMRC has significantly increased its compliance efforts, sending 65,000 notices to suspected tax evaders in the 2024-25 tax year, up from 27,700 the previous year [4] - A new section for declaring crypto gains and losses has been added to this year's self-assessment tax return form, indicating a shift towards greater transparency [5] Group 3: Market Behavior and Tax Strategies - Despite increased scrutiny, retail confidence in digital assets remains strong, as evidenced by a 16% increase in GBP deposits on CoinJar compared to withdrawals leading up to the Budget [5] - Tax treatment for crypto varies globally, with Japan's upcoming 2026 tax reform introducing a flat 20% rate on gains from specified crypto assets, replacing a system that could tax gains up to 55% [6][7]

Core Insights - The U.K. and 47 other countries are implementing the Cryptoasset Reporting Framework (CARF), marking a significant shift in global crypto taxation starting in 2026 [1][4][6] - The CARF aims to bring crypto transactions under the same tax scrutiny as traditional financial assets, addressing the issue of unreported profits from cryptocurrencies [3][5] Group 1: CARF Overview - CARF was developed by the OECD to tackle the growing issue of unreported cryptocurrency profits [3] - Under CARF, crypto exchanges and service providers must collect detailed user information, including tax residency, and report annual transaction data to local tax authorities [3][6] - The framework will facilitate international data sharing among participating countries [3][4] Group 2: Implementation Timeline - The U.K. is among the first adopters, with exchanges required to gather necessary data starting in 2026 and cross-border information sharing beginning in 2027 [4] - A total of 75 countries have committed to implementing CARF, with 48 jurisdictions already moving forward [4] - The U.S. is expected to adopt the framework in 2028, with data exchanges commencing in 2029 [5] Group 3: Implications for Crypto Users - Individuals in participating jurisdictions, particularly high-net-worth traders, will face increased scrutiny regarding their crypto transactions [5][6] - The enforcement of mandatory KYC and data sharing may deter privacy-focused users, leading some to consider decentralized finance (DeFi) or self-custody wallets [7] - Unreported gains could result in audits, back taxes, interest, and penalties, with the U.K. capital gains tax on crypto potentially reaching up to 20% [7]