Starting January 1, 2026, crypto firms operating in the United Kingdom will be required to collect and submit detailed information for every digital asset trade and transfer, as part of the government’s initiative to enhance tax transparency in the crypto space.
According to a statement released by HM Revenue and Customs (HMRC) on May 14, companies must record and report user details such as full name, residential address, tax ID number, the type of cryptocurrency involved, and the transaction amount. The rules will also apply to organizations like businesses, trusts, and charities that are engaging in crypto transactions.
Firms that fail to meet the reporting standards or provide incorrect data could face penalties of up to £300 (approximately $398) per individual transaction. HMRC has indicated that further guidance will be issued to help businesses understand how to meet the new obligations, but it recommends that firms begin collecting relevant data now to prepare.
These measures are part of the UK’s adoption of the OECD’s Cryptoasset Reporting Framework, which aims to boost oversight and ensure proper taxation in the rapidly growing digital asset market.
The UK government is looking to strike a balance between fostering innovation in the sector and enforcing stricter regulations to protect consumers and deter financial crime.
In a related move, Chancellor Rachel Reeves proposed draft legislation in April to bring crypto exchanges, wallet providers, and brokers under tighter regulatory scrutiny, targeting fraud and scam prevention. “This sends a strong message: the UK welcomes innovation but won’t tolerate misuse or instability,” Reeves stated.
A 2024 report by the Financial Conduct Authority highlighted the growing interest in digital assets, noting that 12% of UK adults held cryptocurrency—up from just 4% in 2021.
UK’s Crypto Oversight Strategy vs. EU’s MiCA
While the UK moves to integrate crypto regulation into its existing financial framework, the European Union has taken a different route with its Markets in Crypto-Assets (MiCA) Regulation, which was rolled out last year.
One notable distinction is that the UK will allow overseas stablecoin issuers to operate domestically without registration requirements. Additionally, there will be no volume restrictions on stablecoin usage, unlike in the EU, where such measures may be enforced to manage financial risk.
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