UK Directs Crypto Firms to Collect User, Transaction Data
The UK government is set to tighten compliance mandates for crypto firms by deepening the regulatory governance over the sector. In new guidelines issued to improve tax compliance, crypto firms in the UK have been directed to collect user details including transaction data under the Crypto-Asset Reporting Framework (CARF). Paris-based Organisation for Economic Development (OECD) had announced the CARF legislation back in October 2023, and the UK wishes to adopt these rules ahead of plans to introduce regulations for the crypto sector by 2026.
Crypto Firms to Collect User Details Including Transaction Data
New guidance issued by the UK government has directed crypto firms to collect name, date of birth, and home addresses of their respective retail users. Other information like the country of residence, their National Insurance number, and the Unique Taxpayer Reference, must also be collected from crypto purchasers and holders.
For business users, the crypto firms must maintain legal business names, main business addresses, and company registration numbers, as per the announcement.
“Depending on the information you collect, you may need to submit a report to His Majesty’s Revenue and Customs (HMRC) each year,” the announcement said.
When dealing with transaction details, crypto firms will have to maintain logs of data including the value of funds and the type of crypto used under the guidelines.
“You’ll need to verify that the information you collect is accurate by carrying out due diligence. We’ll update the guidance with information about how to do this in due course,” the announcement added.
UK officials have said that crypto companies found in violation of these laws can invite penalties of up to GBP 300 (roughly Rs. 35,000) per user.
Firms must align their operations as per the CARF laws by January 1, 2026
The UK is actively participating in the globally evolving crypto regulatory landscape. UK’S Financial Conduct Authority (FCA) aims to fianlise a national crypto legislation by 2026.
In the meantime, the Bank of England’s (BOE) Prudential Regulation Authority has instructed UK-based corporates to disclose their exposure to crypto assets.
The BoE also joined forces with the New York Department of Financial Services (DFS) to exchange senior staff officials with a proficiency in managing sectors like digital assets and emerging payments.
In recent months, US-based Coinbase and Austria’s BitPanda have secured FCA approvals in the UK to legalise their businesses.
The UK Treasury has also clarified that the country does not plan to create a US-like national crypto reserve.
