UK Crypto Tax Rules Spark Safety Concerns Amid Global Data-Sharing

The UK's new crypto tax reporting rule has sparked safety concerns among ordinary users, as their sensitive data will be shared with over 70 countries.

Under the regulation, which took effect in January, UK exchanges and custodial wallet providers must collect and report user identities and transaction histories each year. This includes names, home addresses, birth dates, tax residency details, identification numbers, and full trading activity.

The data-sharing framework is part of the Crypto-Asset Reporting Framework (CARF), a global standard created by the Organisation for Economic Co-operation and Development (OECD). The system aims to close long-standing loopholes that allowed crypto tax evasion to flourish, but security experts warn that it could also expose users to real-world risks.

Analysts point to France as an example of the potential dangers of data-sharing. In 2025, a report from Chainalysis found that attacks on crypto holders could reach record levels. The same year, investigations in France uncovered cases where sensitive data was allegedly leaked by insiders within the tax authority.

The global nature of the framework makes it difficult for any single country to change or withdraw. All 27 European Union member states have adopted a similar approach through the DAC8 directive, and major global institutions have endorsed the policy.