UK Crypto Tax New Rules Take Effect, User Data Sharing Raises Security Risk Concerns

Gate News Report, March 20 — The UK has officially implemented new regulations based on the Crypto Asset Reporting Framework (CARF), requiring local crypto service providers to submit detailed user information, including identity data and complete transaction records, to tax authorities. Starting in 2027, automatic data exchange will be conducted with over 70 countries. Regulators believe this mechanism will help curb crypto asset tax evasion but also raise concerns about privacy and security.

Policy expert Freddie New pointed out that such databases could evolve into “target lists” in practice. If data is leaked or misused, individuals holding large amounts of crypto assets could become prime targets for crime. France’s case is frequently cited; after implementing a similar system, there was a noticeable increase in kidnapping and violent extortion against crypto users, and even cases of internal data leaks within tax agencies.

The so-called " wrench attack" is gradually becoming a focus of industry concern, involving threats of violence to force victims to transfer assets. Since cryptocurrencies like Bitcoin are irreversible, once a transfer is completed, it is nearly impossible to recover. Chainalysis reports suggest that the number of related violent incidents could reach a record high in 2025, with a certain correlation to Bitcoin price increases.

On the institutional level, CARF was developed by the OECD and supported by the G20, and has been incorporated into the legal systems of multiple countries. The European Union is also advancing this through the DAC8 directive, making it difficult for individual countries to independently adjust rules. Dion Seymour stated that this framework has clear global coordination features, but it also means that potential risks are hard for individual jurisdictions to control alone.

Analysts believe that balancing enhanced regulation with user safety protection will be a key issue in the future development of crypto industry policies.