UK HMRC Requires Crypto Exchanges to Disclose User Information Beginning in 2026

Digital asset service providers in the United Kingdom will be required to provide customer information to His Majesty’s Revenue and Customs (HMRC) starting January 1, 2026.

This decision follows the UK’s alignment with the OECD’s Cryptoasset Reporting Framework (CARF), aimed at establishing global standards for tax transparency in the realm of digital assets.

According to the new regulations, all cryptocurrency service providers operating in the UK, including exchanges, brokers, and wallet providers, must gather information on each user. Reporting requirements will apply only to users who are tax residents in the UK or in other jurisdictions that are also adhering to CARF.

The information to be collected consists of a user’s full name, residential address, country of domicile, wallet addresses, and details of cryptocurrency transactions. This encompasses transfers, disposals, total proceeds, and market valuations of digital assets.

HMRC has set the deadline for the initial report to be submitted by May 31, 2027, which will include transaction data from the 2026 calendar year.

Subsequent annual reports must be filed by May 31 of the following year. Firms without reportable information in a particular year will not need to submit a report.

Additionally, non-compliance with these requirements may lead to penalties of up to £300 per user. HMRC has outlined that penalties will be enforced for failures in reporting, late submissions, or if the provided data is found to be incomplete, erroneous, or unverified.

The introduction of this reporting framework is a component of the UK’s wider initiative to regulate digital assets within the established financial framework.

In April, the UK Treasury presented a draft amendment to the Financial Services and Markets Act 2000. These proposed amendments are designed to regulate critical aspects of the cryptocurrency industry, such as stablecoins, staking services, and custody of digital assets.

Once implemented, these regulations will bring cryptocurrency enterprises under the oversight of the Financial Conduct Authority (FCA), requiring them to obtain FCA authorization and adhere to regulations similar to those governing traditional financial institutions.

The government has emphasized that these reforms are essential to enhance investor confidence, foster the growth of the cryptocurrency sector, and safeguard investors throughout the UK.