UK virtual asset exchanges to step up tax evasion crackdown from next year…mandatory collection of entire transaction records

Virtual asset (cryptocurrency) exchanges operating in the UK will be subject to an enhanced monitoring system to prevent tax evasion from next year.

On the 28th (local time), crypto-focused media CoinDesk reported that HM Revenue and Customs (HMRC) said it is introducing new rules requiring exchanges to compulsorily collect the entire transaction records of all UK resident customers from January 1, 2026. This is part of policies to block tax evasion and undeclared income arising from virtual asset transactions.

The new rules were prepared as the UK government pursues transparency-enhancing policies in line with international standards, and reporting is expected to include entire on-chain and off-chain transaction data such as buys and sells, deposits and withdrawals, and inter-chain movements.

An HMRC official said, "The possibility of tax evasion through virtual assets is increasing," and "We are strengthening exchanges' data reporting obligations to ensure accurate taxation and market transparency."

If this measure is implemented, the tax reporting burden on virtual asset investors in the UK is expected to increase, and since exchanges will have to build large-scale data collection, storage and reporting systems, operational costs are likely to rise.