Views from: Alice Frei, Head of Security and Compliance at Outset PR
More than 60 countries have signed the CARF (Crypto Asset Reporting Framework), marking 2027 as a milestone year for the comprehensive regulation of cryptocurrency in the tax domain.
The UK and the EU will be the first to implement this framework. Singapore, the UAE, Hong Kong, and the United States will follow closely, planning to fully implement it by 2028.
Industry insiders point out that major crypto platforms are quietly undergoing internal restructuring to adapt to these changes. For users and developers who highly value privacy, the irreversible end of the era of cryptocurrency resistance to regulation is undoubtedly unwelcome news.
However, what appears to be a tightening of regulations actually lays the foundational framework for responsible development in the industry.
For a long time, cryptocurrency trading has been as convenient as magic. Users could send funds, exchange tokens, or use USDT to pay fees at any time, without the involvement of banks, without filling out forms, and without answering any questions. This frictionless sense of freedom made cryptocurrency seem like the future. Now, this chapter is about to come to a close.
The core mechanism of CARF is very straightforward—it requires platforms to track and report the transaction parties, transaction content, fund flows, and transaction amounts, whether it is token exchanges, cash withdrawals, or large expenditures.
Experts analyze that there are significant changes in important details. The era when cryptocurrency transactions only needed to be reported once a year has ended. Under the CARF framework, tax transparency will approach real-time monitoring.
The CARF regulatory scope covers all reporting crypto asset service providers—including exchanges, brokers, ATM operators, and even individual entrepreneurs who regularly assist in fund transfers. Notably, for the first time in history, non-custodial services and decentralized exchanges (DEX) are also included in the regulatory scope.
All jurisdictions joining CARF must complete domestic legislation within one calendar year before formal reporting begins. EU member states must convert these new rules into national law by the end of 2025, with most provisions officially taking effect on January 1, 2026.
Industry experts point out that the direction for crypto service providers is now clear: platforms that could previously ignore reporting obligations must now embed compliance mechanisms into their systems. Although this shift may seem minor, it has long-term implications.
Cryptocurrency is gradually moving from the fringes of the financial system into the mainstream, a process accompanied by the establishment of more checks, record-keeping requirements, and accountability systems. CARF does not completely close the door on innovation, but it ensures that regulators can effectively oversee the development trends of the entire industry.
For years, cryptocurrency has operated in a gray area. It is not illegal, just unregulated. CARF finally brings some structural norms to this market, which has grown too large to continue hiding in the shadows.
Industry experts point out that global tax evasion still drains about $427 billion from public finances each year. With such a large amount of money flowing quickly and covertly, regulators have discovered a regulatory black hole, and CARF is their response to this issue.
Indeed, the framework does weaken the core appeal of cryptocurrency, but we must face reality. CARF does not stifle innovation; rather, it lays the groundwork for the long-sought goals of the industry—it grants legitimacy to cryptocurrency.
The cautious attitude of institutional investors towards entering the crypto market is partly due to regulatory uncertainty. A standardized global reporting system will reduce this concern. Notably, the participation of large capital helps stabilize price volatility.
For ordinary users, CARF will ultimately make tax reporting simple and straightforward. Once platforms begin to automatically share transaction data with tax authorities, cryptocurrency users will no longer need to manually track gains, losses, and debts.
Cryptocurrency is maturing, which inevitably comes with trade-offs. Some old feelings of freedom will change: platforms will start asking for more information, some processes will become more cumbersome, and certain wallets will become less "invisible." But this does not mean an end.
No one will cut off access to crypto services or impose a complete ban. New industry norms are forming regarding what platforms need to collect, what will be flagged, stored, and shared. This tests whether the crypto space can maintain its core values while complying with the rules.
For platforms, the initial compliance burden will be heavy. Legal consulting, infrastructure development, and employee training will require substantial financial investment. If service providers (at least in the initial phase) raise user fees to cover these costs, it is entirely reasonable.
Some platforms may even limit services within jurisdictions that adopt early timelines or simply exit certain markets altogether. However, in the medium to long term, CARF may accelerate the professionalization of the industry.
Legal clarity will attract long-term investment. Users will benefit from stronger protection mechanisms. Service providers that actively embrace this framework now will gain a significant competitive advantage.
Users who have not yet considered transparency issues should start checking whether their commonly used platforms understand CARF regulations, whether they maintain detailed transaction records, and seek guidance from professional cryptocurrency tax advisors. Notably, even seasoned cryptocurrency users may face unexpected dilemmas when disputes arise and audits begin.
Views from: Alice Frei, Head of Security and Compliance at Outset PR.
Related: U.S. Senator Cynthia Lummis drafts independent crypto tax legislation
Original text: “The Path to Legitimizing Cryptocurrency Achieved Through the CARF Regulatory Framework”
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