UK Imposes Obligation on Cryptocurrency Businesses to Disclose All Transactions by 2026
The United Kingdom government has announced a new regulatory framework for crypto firms, marking a significant step in its efforts to bring more oversight to the fast-evolving crypto space. This initiative, outlined by the UK Treasury, aims to enhance transparency and improve tax compliance within the sector.
From 1st January 2026, all crypto companies in the UK, including exchanges, custodians, and brokers, will be required to collect and report detailed data on every customer transaction. This information will include user identities, transaction types, asset details, full names, home addresses, tax identification numbers, and details of entities such as companies, trusts, and charities involved in crypto transactions.
The proposed legislation expands on the UK Treasury's 2023 consultation and aligns with the Organisation for Economic Development (OECD) Cryptoasset Reporting Framework (CARF). The UK is integrating digital assets into its financial oversight framework and is pushing to align the crypto sector with existing financial standards.
The regulatory vision includes not only regulating trading platforms but also wallet providers and crypto lending. Firms that fail to comply with the new reporting requirements or submit inaccurate information may face penalties of up to £300 (approximately $398) per user.
The draft legislation is part of the UK government's broader strategy, which includes regulating the crypto sector to boost investor confidence and drive growth through the Plan for Change. The initiative also aims to reduce risks for consumers and establish clearer compliance expectations for industry participants.
Industry participants are watching closely to see how these evolving regulations shape the future of crypto in the region. Notably, the UK government has dismissed the idea of a Bitcoin reserve and is exploring the use of blockchain for debt. However, recent reports have surfaced about a UK gang creating a meme coin in a crypto money laundering plot, highlighting the need for increased regulation in the sector.
The new regulations are a part of the UK's efforts to integrate digital assets into its financial system and create a more secure and transparent environment for cryptocurrency transactions. As the crypto industry continues to grow, it is expected that similar regulatory measures will be implemented in other countries to ensure the safety and integrity of the financial system.
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