The United Kingdom has announced that all crypto firms operating in the country will be required to collect and report detailed information on every user and transaction starting January 1, 2026. This mandate, unveiled by HM Revenue and Customs (HMRC), aims to bring the crypto sector in line with traditional financial services, boost transparency, and combat tax evasion.

What the New Rules Require

Under the new framework, crypto platforms must:

1. Collect the full legal name, home address, and tax identification number (TIN) of every user.

2. For UK residents, this includes the National Insurance number or Unique Taxpayer Reference; for non-UK residents, the TIN and issuing country are required.

3. Record comprehensive transaction details: the type and quantity of cryptocurrency, value in GBP, date, time, and the nature of the transfer.

4. Report not only individual users but also companies, trusts, and charities transacting on their platforms.

5. Extend these requirements to overseas firms serving UK customers, ensuring no loopholes for cross-border transactions.

Penalties for Non-Compliance

The message from regulators is clear “Comply or face consequences”. Firms that fail to accurately collect or report the required data, or submit incomplete information, risk penalties of up to £300 (approximately $398) per user. Authorities are urging crypto companies to begin gathering this information immediately to avoid a compliance scramble as the deadline approaches..

The Push for Transparency

This regulatory framework is part of the UK’s adoption of the Organisation for Economic Co-operation and Development (OECD) Cryptoasset Reporting Framework (CARF), a global standard designed to close tax loopholes and align crypto industry transparency with that of the banking sector. The move comes amid a surge in crypto adoption: a recent Financial Conduct Authority study found that 12% of UK adults owned crypto in 2024, up from just 4% in 2021.

UK Chancellor Rachel Reeves emphasized the government’s dual aim: fostering industry growth while protecting consumers from fraud and abuse. In late April, Reeves introduced a draft bill to pull exchanges, custodians, and broker-dealers under formal regulation-a step widely seen as a bid to boost investor confidence and support innovation.

How Will This Impact the Industry?

The new rules represent a significant compliance challenge for crypto firms, both domestic and international. Companies will need to overhaul their data collection and verification processes, implement robust due diligence, and prepare for regular reporting to HMRC. Smaller firms may struggle with the added costs and complexity, potentially fueling industry consolidation as only those able to professionalize at speed will thrive.

For users, the days of anonymous crypto trading in the UK are numbered. Every transaction-no matter how small-will be tracked and tied to a verified identity. While this may deter some privacy-focused participants, supporters argue it will help legitimize the sector, attract institutional investment, and prevent illicit activity.

With the January 2026 deadline looming, the UK crypto industry is on notice: transparency is no longer optional. As the government rolls out further guidance in the coming months, firms that act now will be best positioned to navigate the new regulatory landscape-and help shape the future of digital finance in Britain.