Crypto-Asset Reporting Framework (CARF) Guide

Introduction to CARF

The Crypto-Asset Reporting Framework (CARF) is a global tax transparency standard from the OECD. It exists to make the automatic exchange of information (AEOI) on crypto-assets between tax authorities routine, closing the "visibility gap" that let crypto sit outside traditional banking systems for years.

CARF stands on its own, but it complements the Common Reporting Standard (CRS) that banks already use. It gives countries one standardized way to share crypto transaction data automatically, which cuts down on tax evasion and lifts global transparency.

When Will CARF Apply?

Most jurisdictions bring CARF in from 2026, with the first reporting due in 2027 (covering 2026 transactions).
That said, some countries will move earlier or later depending on their own legislation.

Who Must Report? (The RCASPs)

The reporting duty sits with Reporting Crypto-Asset Service Providers (RCASPs), not with individual users.

Definition of an RCASP

An RCASP is any individual or Entity that, as a business, provides a service effectuating Exchange Transactions for or on behalf of customers. That covers:

• Centralized Exchanges: Platforms like Coinbase or Binance
• Brokers and Dealers: Entities acting as counterparties or intermediaries.
• Crypto ATM Operators: Kiosks permitting the exchange of crypto for fiat or other crypto.
• DeFi Operators: Decentralized Finance platforms are included only if there is an identifiable entity or individual exercising "control or sufficient influence" over the platform (e.g., smart contract deployers or front-end operators).

Determining Where to Report

An RCASP reports to a jurisdiction where it has a "nexus." The hierarchy for working out nexus runs:

1. Tax Residence: The jurisdiction where the RCASP is resident for tax purposes.
2. Incorporation/Organization: Where the Entity is incorporated or organized.
3. Place of Management: Where the Entity is managed.
4. Regular Place of Business: Where the RCASP has a regular place of business.

What Assets are Covered?

CARF applies to "Relevant Crypto-Assets," a deliberately wide range of digital assets.

Included Assets

• Cryptocurrencies: Bitcoin, Ethereum, and altcoins
• Stablecoins
• NFTs: Non-Fungible Tokens that are traded on marketplaces or used for payment/investment purposes.
• Tokenized Assets: Real-world assets (RWAs) and wrapped tokens.

Excluded Assets

• Central Bank Digital Currencies (CBDCs): These are treated as fiat currency and reported under CRS
• Specified Electronic Money Products: Digital representations of fiat that are already covered by CRS.
• Closed-Loop Tokens: Assets that cannot be used for payment or investment purposes (e.g., certain in-game tokens non-transferable outside the game).

Due Diligence: Identifying Users

RCASPs run due diligence to identify their Crypto-Asset Users and to decide whether they're Reportable Persons.

Data Collection Requirements

RCASPs have to collect valid self-certifications from users.

For Individuals:

• Full legal name
• Residential address
• Date of birth
• Jurisdiction(s) of residence for tax purposes
• Tax Identification Number (TIN).

For Entities

• Legal name and address.
• TIN and jurisdiction of residence.
• Controlling Persons: If the entity is not an Active Entity or Excluded Person, the RCASP must "look through" the entity to identify the natural persons who exercise control (Beneficial Owners).

Verification

RCASPs confirm the "reasonableness" of each self-certification against what they gathered at account opening, like AML/KYC documentation (passports, proof of address).

What Information is Reported?

Where banking standards fixate on account balances, CARF is built around transactions.

Transactional Data Points

RCASPs report the following on an aggregate basis (summed up by asset type):

• Crypto-to-Fiat Transactions: The total amount paid and received when converting crypto to government currency (e.g., BTC to USD).
• Crypto-to-Crypto Transactions: The fair market value of trades between different digital assets (e.g., ETH to SOL).
• Transfers: The fair market value of transfers to external wallet addresses (including self-custody/cold wallets). Note: RCASPs must collect and retain external wallet addresses associated with transfers for five years.
• Retail Payments: Transfers of crypto for goods or services exceeding USD 50,000.

Valuation

Everything gets reported in one fiat currency. For a crypto-to-crypto transaction, the RCASP has to establish the fair market value at the moment it happened.

Implementation Timeline

Exact dates hinge on domestic legislation, but the broad global timeline looks like this:

Regional Variations:

• European Union: Adopted via DAC8, applying to all 27 member states.
• United States: Implementing a parallel regime via Form 1099-DA, with exchanges likely starting in 2028.

Implications for Users and Providers

For Individuals (Users):

• End of Privacy: Tax authorities will know what you hold, where you hold it, and your complete history of disposals and swaps.
• Retroactive Audits: Authorities may use AI to match CARF data received in 2027 against tax returns filed for 2024–2026.
• Account Freezing: Failure to provide valid self-certification (tax residency info) may result in account freezes.

For Service Providers (RCASPs):

• New Systems: RCASPs must build IT systems to track crypto-to-crypto swaps and convert values to fiat in real time.
• Compliance: RCASPs must implement strict KYC/AML procedures and collect TINs early.
• Penalties: Non-compliance can lead to fines, licensing issues, or criminal penalties.

Getting CARF right as a provider

The standard is the same everywhere; the file each authority will accept is not. On the provider side, the Kryptos CARF and DAC8 reporting platform handles the due diligence, the national formats, and the filing itself. Want to go deeper? Start with which jurisdictions a CASP reports to and the self-certification and TIN validation workflow. US brokers should also get familiar with Form 1099-DA.

About the author

Deepak Pareek

Head of Tax & Accounting - Kryptos