For years, crypto investors thought they could trade, hold, and sell digital assets without anyone tracking their gains. That era is ending. Starting in 2026, countries are automatically sharing your crypto tax data with each other-no requests, no paperwork, no loopholes. This isn’t a rumor. It’s happening. And if you’ve ever bought Bitcoin, sold Ethereum, or earned interest on crypto, this affects you.
How It All Started
The problem wasn’t that people were cheating on taxes-it was that no one could prove they were. Crypto moves across borders in seconds. A person in Germany buys Bitcoin from a U.S. exchange, trades it for Solana on a Singapore-based platform, then cashes out in Canada. Who tracks that? Until recently, no one did. Tax authorities were flying blind. The Organisation for Economic Co-operation and Development (OECD) is a group of 38 wealthy nations that sets global standards for tax, trade, and economic policy. In 2023, under pressure from the G20, the OECD created the Crypto-Asset Reporting Framework (CARF). This is the first global system designed to automatically share crypto tax data between countries. Think of it like the Common Reporting Standard (CRS), which already shares bank account info, but now extended to crypto.What CARF Actually Does
CARF doesn’t ask you to file anything new. It asks crypto platforms to report for you. Every year, companies that let you trade, hold, or earn crypto-like Coinbase, Binance, Kraken, or even decentralized exchanges that meet certain thresholds-must send detailed reports to their local tax authority. That authority then shares that data with every country where the user lives. The report includes:- Your full name and tax ID number
- Your country of tax residence
- Types of crypto-assets traded (Bitcoin, ETH, stablecoins, NFTs)
- Transaction dates and values in local currency
- Capital gains or losses from sales or exchanges
- Income earned from staking, lending, or mining
The EU Is Already Doing It-DAC8
The European Union didn’t wait. In October 2023, EU countries passed DAC8-the eighth amendment to their tax cooperation directive. By January 1, 2026, all EU member states must start collecting crypto transaction data from platforms operating in their territory. The first reports go to tax authorities in 2027. That means if you’re a UK resident who bought crypto on a German exchange, or a French citizen who used a U.S.-based wallet, your data is already being sent to HMRC and the French tax office. The system works silently in the background. You won’t get a notice. But your tax return will soon be checked against what the system already knows.
The U.S. Isn’t Out of the Game
The U.S. doesn’t follow CARF directly. But it’s playing along. The IRS now requires non-U.S. crypto brokers to report transactions involving U.S. taxpayers. And in return, the IRS sends data about foreign users who traded through U.S. platforms like Coinbase or Kraken. So if you’re a Canadian living in Toronto but traded on a U.S. exchange, the IRS will tell Canada what you did. And if you’re a U.S. citizen who used Binance or KuCoin, those platforms will now report your activity to the IRS. It’s a two-way street.Who’s In? Who’s Not?
As of early 2026, 67 countries have committed to CARF. That includes:- All 27 EU member states
- The United Kingdom
- The United States
- Japan, South Korea, Australia, Canada
- Singapore, Switzerland, and most of Latin America
What Happens If You Don’t Report?
You might think, “I didn’t report my crypto gains last year-what’s the worst that could happen?” The worst? A tax audit. A fine. Or worse-penalties for hiding income. Before CARF, tax agencies had to guess. Now, they have exact numbers. If your bank says you made €12,000 in crypto gains in 2025, but you only declared €3,000 on your tax return, the system will flag it. No need for audits based on suspicion. Just a match. A red flag. A letter. In the UK, HMRC already has access to data from Binance, Coinbase, and other platforms. In 2024, they sent out over 12,000 letters to crypto holders asking for explanations. In 2025, that number jumped to 37,000. The next step? Penalties.
Challenges and Confusion
It’s not smooth sailing. Many platforms still struggle with tracking transactions across wallets, DeFi protocols, and cross-chain swaps. If you moved ETH from MetaMask to a decentralized exchange, then swapped it for USDC, then sent it back-how does a platform know that’s one transaction or three? Some don’t. And if they get it wrong, you might get reported incorrectly. Tax laws also vary wildly. In Germany, holding crypto for over a year means no tax. In the U.S., every sale is taxable. In Portugal, crypto gains are tax-free for individuals. CARF doesn’t change your country’s rules-it just gives tax authorities the data to enforce them. That’s why experts warn: don’t assume your home country’s rules apply everywhere. If you traded while living abroad, or moved countries during the year, your tax liability could change. The system doesn’t care about your personal situation-it just reports what happened.What Should You Do Now?
If you’ve traded crypto since 2021, here’s what to do:- Collect your transaction history from every platform you used. Export CSV files. Save them.
- Calculate your gains and losses using the cost basis method your country allows (FIFO, LIFO, or specific identification).
- Review your past tax returns for crypto income you may have missed.
- Voluntarily amend your returns if you underreported. Many countries offer voluntary disclosure programs with reduced penalties.
- Use tax software that supports CARF-ready reporting. Tools like Koinly, CoinTracker, or CryptoTaxCalculator now auto-import data from major exchanges.
What’s Next?
By 2028, CARF will be fully operational in 67 countries. The next wave? Extending it to NFTs, DeFi protocols, and even crypto-backed loans. Central bank digital currencies (CBDCs) are already being included in reporting rules. The goal isn’t to kill crypto-it’s to make it transparent. The message is clear: if you profit from crypto, you pay tax. And now, the world will know.Do I need to report crypto if I didn’t sell it?
Yes, if you earned income from it. Staking rewards, lending interest, airdrops, and mining rewards are taxable as income-even if you never sold the asset. Only holding crypto without selling or earning from it is usually not taxable. But platforms will still report all activity, so tax authorities will see your holdings.
What if I used a non-CARF exchange like Binance?
Binance is still required to report if you’re a resident of a CARF country. Even if the platform is based in a non-compliant jurisdiction, if you live in the UK, EU, U.S., or any of the 67 participating countries, your data will be collected by your home country’s tax authority through other channels-like bank records, wallet analysis, or third-party reports. Non-compliant platforms are increasingly being blocked from banking services in CARF countries.
Can I avoid this by using a private wallet?
No. If you ever cashed out to a bank account, used a centralized exchange, or converted crypto to fiat, that transaction is traceable. Tax authorities can link your wallet addresses to your identity through KYC records. Private wallets only help if you never interact with regulated services-and even then, your spending patterns (like buying a house with crypto) can trigger investigations.
Will CARF apply to crypto I bought before 2026?
Yes. The system reports all historical activity from 2021 onward. Many countries have looked back at crypto transactions from 2021 to 2025 as part of compliance reviews. If you made gains before 2026, you’re still liable. The automatic exchange doesn’t care when you bought-it only cares that you sold or earned.
How do I know if my country is part of CARF?
Check your country’s tax authority website. The OECD publishes a full list of participating jurisdictions. As of 2026, it includes all EU members, the UK, U.S., Canada, Australia, Japan, Singapore, Switzerland, and most major economies. If your country is a member of the OECD or has signed the Common Reporting Standard, it’s very likely participating in CARF.
