The OECD’s Crypto Asset Reporting Framework (CARF) officially took effect, obliging exchanges in 48 jurisdictions to begin recording user transaction data for tax reporting. Developed by the OECD and endorsed by the G20, CARF mandates new customer due diligence procedures for exchanges, brokers, and certain digital asset service providers. Firms must identify a customer’s tax residency and document crypto-to-fiat exchanges, crypto-to-crypto trades, and certain transfer transactions. Data collection for the 2026 fiscal year has begun, with the first automatic information exchanges scheduled for 2027, and early adopters including the United Kingdom and EU member states.
Smaller exchanges that struggle to meet reporting infrastructure costs may face closure or consolidation. The CARF framework aligns with CRS-like transparency standards in traditional finance, imposing new compliance costs on trading desks and institutional investors. While standardization provides clarity, it also raises the risk of broader tax investigations across market participants.
The framework aims to preserve and strengthen global tax transparency amid rapid market growth. Its effective date of January 1, 2026 is a key milestone. While standardization provides clear rules, it also enhances authorities’ ability to conduct cross-border tax investigations. By imposing uniform reporting, CARF marks a fundamental shift for crypto market participants.
Leave a Reply