UK Set to Require Crypto Firms to Report All Customer Transactions

UK to Mandate Crypto Firms to Report Every Customer Transaction Starting January 2026

Beginning January 1, 2026, cryptocurrency firms operating in the United Kingdom will be legally required to collect and report detailed information on every customer trade and transfer. This significant development is part of the UK government’s broader strategy to enhance transparency and compliance in crypto tax reporting.

According to a statement released by HM Revenue and Customs (HMRC) on May 14, crypto platforms must gather and disclose critical user data for each transaction. Required information includes the user’s full name, residential address, tax identification number (TIN), the specific cryptocurrency involved, and the transaction amount. This applies not only to individual users but also to entities such as companies, trusts, and charities engaged in crypto transactions.

The new compliance mandate forms part of the UK’s adoption of the Organisation for Economic Co-operation and Development’s (OECD) Crypto-Asset Reporting Framework (CARF). This international framework aims to promote standardized and robust tax reporting mechanisms for digital assets, reinforcing the UK’s commitment to regulatory transparency in the rapidly evolving crypto industry.

Non-compliance or inaccuracies in data reporting could result in fines of up to £300 (approximately $398.40) per individual violation. HMRC has stated that it will provide detailed guidance in due course to help crypto firms understand and implement the upcoming requirements effectively. Nonetheless, authorities are strongly urging companies to begin collecting necessary user data now to ensure full compliance by the 2026 deadline.

In a parallel move to tighten regulatory oversight, UK Chancellor Rachel Reeves unveiled a draft bill in late April. The proposed legislation aims to bring cryptocurrency exchanges, custodians, and broker-dealers under the UK’s formal regulatory framework. This initiative is designed to tackle issues such as fraud, abuse, and market instability.

“Today’s announcement sends a clear signal: Britain is open for business — but closed to fraud, abuse, and instability,” Reeves stated.

The government’s dual approach of enforcing strict data reporting and expanding regulatory supervision underscores its intent to foster a secure and accountable crypto environment. It also seeks to position the UK as a global leader in digital finance while ensuring consumer protection.

According to a 2024 study by the UK’s Financial Conduct Authority (FCA), cryptocurrency ownership among UK adults rose to 12%, up sharply from 4% in 2021. This surge in adoption highlights the importance of regulatory frameworks that can keep pace with growing market participation.

UK’s Regulatory Direction vs. EU’s MiCA Framework
The UK’s integration of CARF stands in contrast to the European Union’s Markets in Crypto-Assets Regulation (MiCA), introduced last year. While both aim to regulate digital assets, the approaches differ significantly.

For instance, the UK will permit foreign stablecoin issuers to operate within its jurisdiction without the need for local registration. Additionally, the UK has not imposed volume caps on stablecoins—a notable departure from the EU’s more restrictive stance designed to mitigate systemic risks.

The UK’s balanced strategy reflects a desire to maintain financial innovation and industry growth while implementing robust oversight to curb misuse and enhance public trust in crypto markets.