The Crypto-Asset Reporting Framework (CARF) has established new global tax compliance requirements, significantly impacting cryptocurrency transactions. The framework mandates platforms, including decentralized exchanges (DEXs) and non-custodial services, to track and report user transactions in near real-time.
Jurisdictions implementing CARF must enforce compliance by 2026. This deadline compels crypto service providers globally to rapidly develop and deploy robust systems capable of meeting the stringent reporting standards.
Proponents view CARF as a major catalyst for the cryptocurrency industry’s maturation. The framework is expected to recover billions in lost tax revenues annually and contribute to improved market stability by enhancing transparency and regulatory oversight.
While CARF aims to balance transparency with user privacy through compliant reporting mechanisms, its broad data collection mandate has raised significant privacy concerns among users and industry participants.
Meeting CARF’s requirements necessitates substantial investment from crypto platforms in both legal compliance and technological infrastructure. This investment pressure is anticipated to accelerate the professionalization of the industry as providers adapt to the new regulatory landscape.