The UK government has announced that crypto firms will be required to report all user transactions starting January 1, 2026. This move aims to strengthen crypto tax reporting practices and improve transparency in the industry.
Key Requirements:
- User Data Collection: Crypto firms must collect and report detailed user information, including:
- Full name
- Home address
- Tax identification number
- Transaction Reporting: Firms must report every transaction, including:
- Cryptocurrency used
- Amount transferred
- Entities Covered: The regulation applies to:
- Individual users
- Companies
- Trusts
- Charities
Consequences of Non-Compliance:
- Penalties: Up to £300 per user for inaccurate or incomplete reporting
- Encouragement to Comply: Authorities urge firms to start collecting data now to ensure compliance readiness
Rationale Behind the Regulation:
The UK government aims to establish a robust regulatory framework that supports industry growth while ensuring consumer protection. This move contrasts with the EU's MiCA framework, as the UK will allow foreign stablecoin issuers to operate without registration and impose no cap on stablecoin volumes ¹.
