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Those who hold cryptocurrency in the United Kingdom must now share their account details with tax officials. This is to ensure all relevant taxes, such as capital gains, are paid.
The allure of Bitcoin and other cryptocurrencies has been that they are decentralised and free from institutional interference. Yet as they become more widely accepted in mainstream finance, the sector is being forced to change. One major dilemma has been taxation, and authorities in the United Kingdom have now brought into effect laws which state account details must be shared with tax authorities.
Cryptocurrencies Volatile Path
All of this could not have come at a more crucial time for Bitcoin and other cryptocurrencies. The last two months of 2025 were not the strongest for crypto after a year of gains. Spot Bitcoin ETFs have seen large monthly outflows, with more than 3.5 billion dollars’ worth and several weeks near or above 1 billion dollars. The Bitcoin price today stands at $68,917 as of January 2nd, 2026, down from $124,310 in October.
Estimates are that these tax changes could raise at least £315 million a year by April 2030. It has been likened to the same amount of money required to fund 10,000 newly qualified nurses for a year. The government were keen to highlight that this is not a new tax, and that all taxes must be paid on gains made. Crypto tax evasion has long been a worry for HMRC, which has found it hard to track those who have bought low and sold high. There is also a scheme for anyone who made profits before April 2024, who can come clean about their gains.
James Murray MP, Exchequer Secretary to the Treasury, noted that “We’re going further and faster to crack down on tax dodgers as we close the tax gap and deliver on our Plan for Change. By ensuring everyone pays their fair share, the new crypto reporting rules will make sure tax dodgers have nowhere to hide, helping raise the revenue needed to fund our nurses, police and other vital public services.”
The Cryptoasset Reporting Framework
The move is an adoption of the OECD’s Cryptoasset Reporting Framework (CARF). It is part of a wider global effort to close the gaps and loopholes provided by digital assets. Signed in 2023, it has taken until January 2026 to implement it fully. The first reporting will begin in May 2027. This will move digital assets under the same regulation as any other investments, such as property, stocks or shares.
CARF is being adopted by the EU, the US and many other countries. It means cross-border taxation, and chasing those who skip it will become easier. Even offshore exchanges could report to HMRC, making evasion harder. Global users will now face more scrutiny, and for UK users, it makes it harder to hide behind international platforms.
A reporting cryptoasset service provider is broadly defined and covers any business that has influence over crypto transactions. Thus, brokerage services are also covered. While software is not regulated, if a company has considerable control over the software or can manipulate it, then it will.
Crypto exchanges, service platforms and providers of wallets will have to adapt. They must now collate, report and verify user information and data on transactions to the tax bodies. All of this information is similar to the data banks must provide. It includes where the person resides for tax purposes, wallet-to-wallet transfers, tokenised assets and other related concepts. This data will then allow HMRC to detect any crypto gains that have not been reported or are not aligned with the figures they have been given.
Major Changes in 2026
The United Kingdom’s Financial Conduct Authority is also running a public consultation until February. This is on other possible rules changes for the crypto sector. So far, ideas have been rules around lending and borrowing, ethics and responsibility for brokers, along with standards for crypto exchanges.
Traditionally, the New Year has often brought renewed interest in cryptocurrency and sparked fresh price rises. Only 2019 and 2023 saw it at lower prices than it was a year before. These stood at $3,843 from $13,657, and $16,625 from $47,686, respectively. However, 2026 presents a very different playing field from previous years, with these increased taxation regulations being one of many variables on the table.
Is Crypto a Good Investment for Mothers?
All investments carry a risk, and cryptocurrency has a higher risk than others. This is because of its volatility, which makes it go up and down in price rapidly. It is also not a physical asset, such as oil or wheat, and thus is massively influenced by speculation.
In its defence, crypto has made huge gains for many people. If you study its trajectory since its inception, few assets have risen as quickly. With prices low, this could make it a great time to invest in it. However, you must be careful. Use it as part of a wider portfolio and never invest more than you can afford to risk.
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