Sovos, a global tax compliance and regulatory reporting technology provider, has partnered with Label to deliver a comprehensive CARF solution for digital asset platforms.
The collaboration aims to help digital asset exchanges, brokers, custodians and Virtual Asset Service Providers (VASPs) comply with the OECD’s CARF requirements, which introduce mandatory reporting of digital asset transactions from 2027 for the 2026 tax year in participating jurisdictions.
As governments move to close tax transparency gaps across the digital asset ecosystem, firms are facing increasing pressure to manage complex cross-border reporting obligations.
Sovos operates as an “always-on” tax compliance company, supporting organisations with regulatory reporting across multiple tax regimes.
Its capabilities span digital asset tax compliance, 1099 reporting, unclaimed property obligations and broader tax information reporting requirements. Through its Sovos Partner Network, the company integrates specialist solutions to provide end-to-end compliance coverage for financial institutions and digital asset firms navigating evolving global rules.
Label focuses on automated compliance solutions for FATCA, CRS and CARF. Its CARF technology includes automated onboarding with tax self-certification collection and real-time validation, transaction aggregation across crypto-to-fiat, crypto-to-crypto transfers, staking rewards and retail payments, and OECD CARF XML generation. The platform is designed to integrate with existing FATCA and CRS workflows, enabling institutions to manage multiple global regulatory frameworks through a single system.
The joint offering, branded as Label CARF + Sovos 1099-DA, combines Label’s purpose-built CARF infrastructure with Sovos’ established digital asset tax reporting capabilities. It automates core compliance processes including client onboarding, tax self-certification, real-time transaction aggregation, fiat valuation using foreign exchange rules and OECD CARF XML generation with zero-rejection accuracy. The solution also integrates CARF reporting with 1099-DA, 1099-B and other tax forms, while supporting state-level reporting readiness as 1099-DA becomes part of the Combined Federal/State Filing Program.
Additional features include unified reporting across digital assets and traditional investments, automated cost basis tracking and gain/loss calculation, comprehensive tax ID compliance with automated W-8/W-9 collection and IRS TIN matching, and consolidated tax statements designed to improve the customer experience across asset classes.
Sovos VP of Regulatory Affairs Wendy Walker said, “Digital asset platforms are navigating an increasingly complex regulatory landscape, CARF reporting now joins existing obligations like 1099-DA, unclaimed property, and traditional tax information reporting. Our partnership with Label combines our proven crypto tax compliance capabilities with their specialized CARF expertise. Together, we deliver a unified solution that addresses the full spectrum of digital asset reporting requirements.”
Label chief revenue officer Scott Nice said, “Building CARF compliance capabilities in-house is a significant undertaking for digital asset platforms, requiring specialized regulatory expertise, complex data aggregation, and precise XML formatting. We’ve developed purpose-built technology that handles this complexity. Partnering with Sovos allows us to embed CARF reporting within the broader tax compliance ecosystem, giving digital asset platforms a proven solution that works alongside their existing reporting obligations.”
Walker added, “The digital asset industry needs compliance partners who can scale with the rapid pace of regulatory change. This partnership positions both companies to serve growing demand as CARF implementation accelerates globally and digital asset platforms seek trusted, proven technology to meet their obligations.”
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