Crypto is becoming harder to keep outside the traditional tax-reporting system, and identity verification specialist Identomat says the shift is forcing platforms to confront gaps in their customer data long before any report reaches a tax authority.
The OECD’s Crypto-Asset Reporting Framework (CARF) was designed to bring greater tax transparency to cryptoassets by requiring relevant service providers to collect and report tax-related information about their users and transactions.
The UK has implemented CARF from 1 January 2026, with the first international exchanges of information planned for 2027. For crypto exchanges and other affected service providers, Identomat notes that this creates a practical challenge that goes well beyond producing an annual report: before the right tax information can be reported, platforms need to know exactly who their customers are, where they are tax resident, and whether existing account information is complete and reliable.
In the UK, Reporting Cryptoasset Service Providers must carry out due diligence and report relevant transactional information to HMRC annually, covering details such as name, address, date of birth, tax residence and tax identification number alongside transaction data. Identomat points out that this obligation starts long before submission, beginning instead with customer data collection and verification.
Transaction records are only useful for tax reporting when they can be reliably linked to the correct customer, and platforms with millions of accounts opened under varying onboarding standards over the years may find that historic data does not meet today’s bar. Some users provided limited information at registration; others have since changed country or tax residence. For many firms, Identomat argues, CARF compliance may therefore become as much a customer remediation exercise as a reporting one.
Tax residence adds another layer of complexity, since CARF depends on exchanging information between participating jurisdictions, meaning identity, address and tax data cannot sit as disconnected records but must form one reliable customer profile.
This is where identity verification fits in. It does not calculate tax liability or replace reporting systems, but it can confirm a customer’s identity, ensure data belongs to the right person, and enable missing details to be collected consistently.
Identomat’s platform combines identity verification, liveness checks, address verification, KYC questionnaires and AML screening within configurable workflows, allowing new customers to be verified in full while existing, already-verified customers are only asked for missing information. For corporate customers, KYB processes can capture details on the business, its representatives and beneficial owners, helping older records reach current standards without forcing every user through a full re-onboarding journey.
Ultimately, Identomat frames CARF as a reminder that regulatory reporting is only as reliable as the customer data behind it, meaning crypto platforms will need robust data infrastructure throughout the customer relationship, not just at year-end.
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Copyright © 2026 RegTech Analyst
