UK crypto exchanges must link users to home addresses under new tax rules

What the new rules actually require

CARF applies to UK-based cryptoasset service providers. That category covers exchanges and wallet providers. These firms must gather a detailed profile for each user. The list includes full name, date of birth, home address and tax identification number.

What critics are worried about

Bitcoin transactions sit on a public blockchain that anyone can browse. HMRC has been building toward this for a while. The agency has used blockchain analytics tools since 2020, which let it connect user identities to on-chain transactions.

What this means for users, exchanges and the market

For UK crypto users, the practical shift is simple. Using a domestic exchange will increasingly mean that your on-chain activity can be tied to you, and that link may be shared with other CARF jurisdictions.

International data sharing among CARF jurisdictions is expected to start around the same point.

So the information may not stay inside the UK.

HMRC's stated aim is tax compliance.

The agency estimates the framework will help recover at least £300 million in unpaid tax over five years.

The open question is whether HMRC's projected £300 million in recovered tax will be judged worth the privacy trade-off.

That debate will likely hinge on how well exchanges and governments protect the data, because a leak would turn a theoretical risk into a very real one.