Common Reporting Standard and Crypto Taxation: What You Need to Know in 2026

Ben Bevan 7 December 2025 24 Comments

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Before 2026, tax authorities had a blind spot when it came to crypto. You could buy Bitcoin in one country, trade it on a platform based in another, and cash out in a third-without anyone knowing. That’s changing. Starting January 1, 2026, the Common Reporting Standard gets a major upgrade to close that gap. And it’s not just about bank accounts anymore. Crypto is now in the crosshairs.

What the CRS Actually Covers Now

The Common Reporting Standard was never meant for crypto. Back in 2014, it was built to catch people hiding money in offshore bank accounts. But digital assets don’t sit in banks. They live on wallets, exchanges, and decentralized platforms. So the OECD updated it. The new version, called CRS 2.0, now includes crypto-assets as reportable financial holdings.

Under CRS 2.0, if you hold crypto through a financial institution-like a crypto exchange, a custodial wallet provider, or an investment fund that trades digital assets-that institution must report your holdings to your home country’s tax authority. This includes Bitcoin, Ethereum, stablecoins like USDC, and even certain NFTs if they’re traded like investment products.

The key change? It’s not about transactions anymore. It’s about ownership. If you have $5,000 worth of crypto in a custodial account on a platform that reports under CRS, that gets reported. No matter where you live or where the exchange is based.

How CARF Is Different (And Why It Matters)

CRS doesn’t track trades. That’s where CARF comes in. The Crypto-Asset Reporting Framework is the new sibling to CRS. While CRS watches what you own, CARF watches what you do. Every time you swap Bitcoin for Ethereum, sell a token for fiat, or pay for something with crypto, CARF requires the platform to report that transaction.

Think of it like this: CRS tells your tax office, “John has $12,000 in crypto.” CARF tells them, “John sold $8,000 of that Bitcoin last year and bought $5,000 in Solana.” Together, they give tax authorities a full picture: holdings, activity, and gains.

Both frameworks start reporting in 2026, but CARF’s data won’t be exchanged until 2027. That gives institutions time to build the systems needed to track every trade. But don’t wait. If you’re using a platform that reports under CRS now, they’re already preparing for CARF.

Who Has to Report? (It’s Not Just You)

You might think this only affects big investors. It doesn’t. Any financial institution that holds crypto for clients must comply. That includes:

Centralized crypto exchanges (Binance, Kraken, Coinbase)
Custodial wallet providers (Coinbase Custody, BitGo)
Investment funds that trade crypto
Insurance companies offering crypto-backed products
Banks that offer crypto trading or custody services

These entities are now legally required to identify foreign tax residents, collect their personal details (name, address, tax ID), and report their crypto holdings and transactions annually. If you’re a New Zealander using a U.S.-based exchange, your data goes to Inland Revenue. If you’re a German citizen holding crypto on a Singaporean platform, your tax office gets it.

There’s no opt-out. Even if you don’t file a tax return, the platform will report anyway. And your home country will match that data against what you declare-or don’t declare.

Dual wallet sketch comparing unreported and reported crypto holdings with annotations.

What Counts as a Crypto-Asset? (It’s Broader Than You Think)

The OECD doesn’t just mean Bitcoin. The official definition covers any digital representation of value that uses blockchain or similar tech to verify transactions. That includes:

Bitcoin, Ethereum, and other major cryptocurrencies
Stablecoins (USDT, USDC, DAI) tied to fiat currencies
Derivatives based on crypto (futures, options, perpetual swaps)
Some NFTs-if they’re held as investments, not collectibles
Central Bank Digital Currencies (CBDCs) like the digital euro or e-CNY

Non-fungible tokens (NFTs) are tricky. If you bought an NFT as a digital painting to hang on your wall? Probably not reportable. But if you bought it as an investment, traded it for profit, or used it as collateral? That’s reportable under CRS.

And here’s the catch: if you hold crypto in a non-custodial wallet-like MetaMask or Ledger-your platform doesn’t report it. But if you later move that crypto to a custodial wallet on an exchange, the exchange will report the incoming balance. So hiding crypto off-exchange only delays the report. It doesn’t avoid it.

How This Changes Your Tax Obligations

If you’ve been ignoring crypto taxes because “no one’s watching,” you’re in for a surprise. Tax authorities already have your bank data. Now they’ll have your crypto data too. And they’re getting better at connecting the dots.

Let’s say you bought $10,000 of Ethereum in 2023 and sold it for $18,000 in 2025. You didn’t report the $8,000 gain. In 2027, your home country receives a CARF report showing that sale. They cross-check it with your tax return. If it’s missing? You’ll get a notice. Penalties can be steep-up to 75% of the unpaid tax in some countries.

Even small trades matter. Swapping $500 of Dogecoin for Shiba Inu? That’s a taxable event. The platform reports it. The tax office sees it. If you didn’t record the cost basis, you’ll owe tax on the full $500 as a gain.

And if you’re a non-resident? CRS doesn’t care. If you’re a tax resident of New Zealand and you hold crypto on a Swiss exchange, Switzerland reports your holdings to New Zealand’s Inland Revenue. It doesn’t matter where the exchange is. It matters where you live.

What Countries Are Doing This?

As of 2025, 120 countries have adopted CRS. The 2026 amendments are being rolled out by the same group. The European Union is implementing it through DAC8, a new tax transparency directive. The UK, Guernsey, the U.S., Canada, Australia, Japan, and Singapore are all on board. Even countries with strict capital controls-like India and Brazil-are preparing to join.

The U.S. doesn’t technically use CRS. It uses FATCA. But FATCA already covers crypto. And since the U.S. is part of the CARF agreement, American exchanges will report to foreign tax authorities too. So if you’re a U.S. citizen living abroad, your crypto data goes to your home country-and back to the IRS.

There’s no safe haven anymore. Even if you move to a country that hasn’t adopted CRS yet, your home country will still report your holdings if you use a platform in a CRS country. And if you later return home? They’ll have the records.

Global network sketch showing interconnected countries with crypto data flows in indigo and gold.

What Should You Do Now?

You can’t stop the system. But you can prepare for it.

Track every transaction. Use a crypto tax tool like Koinly, CoinTracker, or TaxBit. Record buys, sells, swaps, staking rewards, and airdrops. Don’t rely on exchange summaries-they’re not always accurate.
Know your cost basis. You need to know how much you paid for each coin. FIFO, LIFO, or specific identification? Pick a method and stick with it.
Don’t use non-custodial wallets for long-term storage if you’re a frequent trader. Moving crypto to a wallet to avoid reporting doesn’t work. When you cash out later, the exchange will report the sale-and they’ll know the asset came from you.
File your crypto taxes, even if you think you owe nothing. Zero gains? Still report. It shows you’re compliant.
Update your records for 2026. If you held crypto in 2025, make sure your records are clean. That’s the year that will be reported in 2026.

Platforms are upgrading their systems. You should upgrade yours too. The days of hoping your crypto activity stays invisible are over. The system is built. It’s global. And it’s watching.

What Happens If You Don’t Comply?

The penalties aren’t just about money. In many countries, failing to report crypto income can lead to:

Back taxes with interest
Fines up to 75% of the unpaid tax
Loss of tax credits or deductions
Legal action for tax evasion
Difficulty opening bank accounts or getting loans

Some countries, like the UK and Australia, have already launched crypto tax amnesty programs. They’re giving people a chance to come forward and pay what they owe-with reduced penalties. But those windows are closing. If you wait until you get a letter, you won’t get a second chance.

And remember: your crypto exchange isn’t going to protect you. Their job is to report. They’re not your accountant. They’re not your tax advisor. They’re the middleman handing your data to the taxman.

What’s Next After 2026?

CRS and CARF are just the beginning. The OECD is already looking at DeFi protocols, DAOs, and privacy coins. If you’re using a decentralized exchange like Uniswap or swapping crypto via a smart contract, don’t assume you’re safe. The next update will likely require platforms to report DeFi transactions too.

Expect more integration with other systems-like anti-money laundering databases, KYC records, and even blockchain analytics tools. Tax authorities are using Chainalysis and Elliptic to trace transactions across wallets. They don’t need your permission. They just need the data.

By 2030, crypto tax compliance won’t be optional. It’ll be as routine as filing your income tax. The question isn’t whether you’ll be caught. It’s whether you’ve been ready for it all along.