The UK has been introducing back-to-back crypto reforms through HM Revenue and Customs (HMRC). The UK government has introduced another sweeping regulatory move, driven by the adoption of the Organisation for Economic Co-operation and Development’s (OECD) Cryptoasset Reporting Framework (CARF). Starting 1 January 2026, all crypto firms will have to collect and disclose detailed user and transaction data.
“From 1 January 2026 if you provide cryptoasset services in the UK, you’ll have new responsibilities for collecting data and reporting it to HMRC,” the 14 May 2025 announcement said.
All cryptoasset service providers – both domestic and foreign platforms serving UK clients – must collect and report extensive information on every user and every transaction. This will include address, country of residence, national insurance number, unique taxpayer reference, and more.
The UK is going to require crypto firms to report all user transactions starting Jan 2026
Non-compliance may cost £300 per user
Compliance would actually end up costing more than that due to current rates
KYC and AML are the enemy of crypto pic.twitter.com/uQU1Lbnupb
— Tall (@tall_data) May 18, 2025
Explore: The 12+ Hottest Crypto Presales to Buy Right Now
Hefty Penalty for Non-Compliance
Failure to comply with the new rules introduced by the UK government, or failure to submit inaccurate or incomplete data, will expose firms to significant penalties. HMRC has set fines at up to £300 per user for misreporting, a figure that could quickly escalate for platforms with large user bases.
According to the government, the UK intends to enhance tax compliance and crack down on illicit activity. The government also intends to align crypto oversight with traditional banking standards. For this, the companies will have to report the value of the transaction, type of cryptoasset, eg Bitcoin, Ethereum, and more.
DISCOVER: Top Solana Meme Coins 2025: 7 Best Buys Updated
UK Decides to Align with US Rather than EU Over Crypto Regulation
Amidst fear of losing ground to global fintech hubs, the UK has announced new draft regulations for the crypto sector.
On 29 April 2025, Finance Minister Rachel Reeves said, “Through our Plan for Change, we are making Britain the best place in the world to innovate – and the safest place for consumers. Robust rules around crypto will boost investor confidence, support the growth of Fintech and protect people across the UK.”
The government is now introducing compulsory regulation for crypto exchanges, dealers, and agents.
Importantly, the UK has decided to align with the US, treating crypto assets as securities. This marks a departure from the EU’s Markets in Crypto-Assets (MiCA) framework, which took effect in December 2024.
“The Chancellor also revealed that the UK and US will use the upcoming UK – US Financial Regulatory Working Group to continue engagement to support the use and responsible growth of digital assets,” the UK government website said.
The government aims to finalize the legislation by the end of 2025.
DISCOVER: 20+ Next Crypto to Explode in 2025
Key Takeaways
Why you can trust 99Bitcoins
Established in 2013, 99Bitcoin’s team members have been crypto experts since Bitcoin’s Early days.
Weekly Research
100k+Monthly readers
Expert contributors
2000+Crypto Projects Reviewed
Maximize Your Trading With Margex’s 20% Deposit Bonus
What Are the Best New Presales to Buy in June 2025?
Crypto Wallet Promos & Discounts
14 Best Crypto Bonuses in 2025 – Top Exchange Offers & Promotions
Maximize Your Earnings with Bitunix- Huge Bonus Until August 2025
Free Bitcoin Crash Course
- Enjoyed by over 100,000 students.
- One email a day, 7 days in a row.
- Short and educational, guaranteed!
