Bitcoin Privacy At Risk? CARF And Government Oversight

The OECD’s Cryptoasset Reporting Framework, which some call CRS 2.0, requires Reporting Crypto-Asset Service Providers to submit annual reports on customers’ crypto transactions to tax authorities in 48 participating countries, including the UK, the US and much of the EU. It is intended to close gaps in crypto tax compliance, with estimates suggesting that 55 to 95% of crypto-asset holders in the UK do not file crypto taxes.

Exchanges and platforms will hold users’ home addresses alongside details of their holdings, raising concerns about data breaches and the risk of physical attacks. Laura Knight of Knightbridge Tax says CARF data provides only half the picture and could produce inaccurate risk profiles, and Dan Howitt of Recap warns that leaked holdings data could lead to extortion or theft with no recourse. The piece also considers whether users might move to non-KYC exchanges or to jurisdictions outside CARF, such as the UAE.