The cryptocurrency community is concerned about privacy as new tax reporting frameworks for cryptocurrencies are set to come into effect in 2026, leading to increased scrutiny of digital asset activity worldwide by regulators.
A total of 48 countries have implemented the Crypto Asset Reporting Framework (CARF) this year, and the European Union's DAC8 law has also officially come into effect.
Learn about CARF and DAC8
To better understand, CARF is a framework developed by the OECD that applies global tax transparency standards to ensure tax authorities receive information on cryptocurrency transactions automatically and in a standardized manner, similar to the Common Reporting Standards (CRS) for traditional financial accounts.
This framework requires service providers within its scope to collect more customer information, identify and verify users' tax residences, and periodically report to domestic tax authorities on transactions and income related to crypto assets.
Subsequently, participating countries will exchange data under international information- Chia agreements. As of January 1st, 48 countries, including the United Kingdom , Germany, France, Japan, South Korea, and Brazil, had implemented this framework. The first annual report is due in 2027.
Meanwhile, the European Commission's DAC8 directive also came into effect at the beginning of this year. Although CARF and DAC8 both aim for similar goals, the two frameworks differ in scope, implementation methods, and the extent of their impact in each region.
DAC8 mandates the reporting of crypto assets across all 27 EU member states. Crypto service providers must collect and report detailed user and transaction data to national tax authorities.
These agencies will then continue to Chia information internally within the EU. Businesses will have a six-month transition period, until July 1, 2026, to fully comply. The first report will be submitted within nine months of the end of the first financial year under the directive, i.e., from January 1 to September 30, 2027.
Community reaction to new cryptocurrency tax frameworks
The goal of the new policies is to ensure fair and effective taxation, however, the community has also expressed many concerns . Market observer Heidi commented that the EU's DAC8 has "ended privacy in crypto" .
“The tax authorities now automatically monitor your digital assets. Data collection for the 2026 tax year has already begun. Privacy has never been more important,” she Chia .
Social media influencer Bernie argues that this issue goes far beyond just taxation. According to her, it's a global regulatory framework implemented without direct public consent, aiming to create a tightly controlled digital financial system.
“Crypto isn’t banned, but privacy in crypto is being erased. You don’t get to vote on this, and they don’t want you to realize that financial privacy no longer exists,” she said .
Besides privacy concerns, the implementation of DAC8 also presents significant challenges for crypto users. BeInCrypto notes that many users are facing difficulties in reporting taxes for activities occurring across multiple blockchains and platforms.
Consolidating transactions across multiple wallets, blockchains, and exchanges is complex and prone to errors. According to DAC8, if tax authorities detect tax evasion or avoidance, they can coordinate with other EU countries to take action, potentially freezing or seizing crypto assets.
Thus, the implementation of CARF and DAC8 marks a major step towards global crypto tax transparency, but at the same time reduces individual privacy and increases compliance complexity. Once these frameworks officially come into effect, crypto users worldwide will have to adapt to stricter reporting regulations, finding a balance between privacy and the reality of regulatory oversight.
