The UK is preparing to enforce strict new regulations on cryptoasset firms, requiring detailed reporting of user and transaction data starting January 2026. Under the UK’s adoption of the Cryptoasset Reporting Framework (CARF), all crypto platforms operating within or servicing the UK must collect legal information from users, including names, addresses, and tax identification numbers.
This move is part of a broader initiative to bring crypto transactions in line with traditional financial systems and reduce tax evasion. The focus keyword here is: UK crypto regulations.
Comprehensive Data Collection Required
Beginning in 2026, crypto platforms will be required to record every trade, transfer, and transaction involving UK users or residents of other CARF-participating jurisdictions. This includes recording the asset type, value, volume, and the nature of each transfer.
Foreign-based platforms that serve UK clients are also subject to these rules. Failing to comply could lead to penalties of up to £300 per user for inaccurate or incomplete reports.
The UK tax authority is encouraging firms to begin collecting data now to ensure full compliance when the rules take effect.
Regulation Aimed at Growth and Protection
Chancellor Rachel Reeves reaffirmed the government’s commitment to regulating crypto responsibly during UK Fintech Week. Draft legislation has been introduced to bring crypto exchanges, dealers, and custodians within the UK’s regulatory perimeter.
“Robust rules around crypto will boost investor confidence, support the growth of fintech and protect people across the UK,” Reeves said, highlighting the balance between innovation and accountability.
The UK is also exploring the creation of a transatlantic sandbox for digital assets to foster regulatory cooperation with the United States.
A Divergent Path from the EU’s MiCA Framework
Unlike the EU’s Markets in Crypto-Assets (MiCA) regulation, the UK plans to integrate crypto into its existing financial structure. This includes crypto lending, staking, and stablecoins being governed by traditional financial laws, without strict authorisation requirements for foreign stablecoin issuers.
The MiCA Crypto Alliance noted that the UK’s model suggests a more flexible, globally aligned approach, as opposed to the EU’s more restrictive localisation strategy.
