The Tax Man is Watching Your Crypto

If you own any crypto at all, you need to know these four letters.

C.A.R.F.

The Crypto Asset Reporting Framework. And if you haven't heard of it yet, you're not alone, most crypto investors have no idea it exists.

Here's the short version: beginning January 2026, every crypto exchange that requires KYC will be collecting your full transaction and P&L data and handing it directly to tax authorities around the world.

48 jurisdictions have already signed up. The EU has baked it into law through DAC8. The UK legislated it through the Finance Act 2024. And the US, while not formally part of CARF, has introduced its own compatible regime via a new Form 1099-DA that mirrors the same data requirements.

Let me be specific about what gets reported, because this isn't just a basic summary of your balances. Exchanges will be reporting:

• Your tax residency and taxpayer identification number
• Every acquisition and disposal, aggregated by asset type
• Transfers to all your separate wallets, including the number of units and total value
• Transaction categories including airdrops, staking income, and retail payments above $50,000

In other words, from 2027 onwards, when these reports start being exchanged between countries, every single tax authority involved will be able to see whether you're reporting the correct amount of tax on your crypto activity. If you're a UK resident trading on a Cayman-based exchange, that exchange reports to Cayman authorities, who share it with HMRC. There's nowhere to hide.

Some will call it surveillance. I call it growing up.

The days where crypto was the wild west of finance are over. Now it's integrated into finance.

Banks are migrating their settlement infrastructure onto blockchains. The NYSE and DTCC are actively exploring moving stock transactions to settle on-chain. Provided Brian Armstrong can stop whining, we're on the verge of passing the Clarity Act into law, finally establishing whether the SEC or CFTC takes oversight of specific elements of crypto.

And now, the OECD has established a sweeping global tax framework that will track your every move in the crypto market.

The implication is simple: if you're not already reporting your crypto gains accurately, the window to get your house in order is closing fast.

The exchange of your data between tax authorities begins next year.

Yesterday I had Dan Huscher, COO of Lukka, which is becoming the largest crypto tax and data infrastructure provider in the world, powering reporting for the likes of S&P, State Street, and eToro, on the show to break down exactly what CARF means for you, how your data flows from exchange to tax authority, and what you need to do about it before 2027.

If you hold any crypto at all, you need to understand what's happening here.

Click here to watch the replay.

Cheers,

Louis Sykes
Senior Crypto Analyst, All Star Charts