Crypto’s path to legitimacy runs through the CARF regulation

Opinion by: Alice Frei, head of security and compliance at Outset PR

More than 60 countries have signed on to CARF (Crypto-Asset Reporting Framework), marking 2027 as the year crypto goes fully on the grid, tax-wise.

First up are the UK and the EU. Singapore, the UAE, Hong Kong and the US are on deck next, with plans to roll out in 2028

Behind the scenes, crypto platforms are quietly rebuilding in response. To the most privacy-conscious users and developers, the irreversible end of crypto’s resistance to surveillance is unwelcome news

What appears to be regulatory capture on the surface, however, is actually the framework that sets conditions for the industry’s responsible evolution.

The market implications of CARF

For the longest time, moving crypto around felt like magic. Anyone could shoot over some funds, flip tokens or cover expenses with USDT on the go, with no banks, no forms and definitely no questions asked. The frictionless freedom made crypto feel like the future. That chapter is now coming to a close

What CARF does is pretty straightforward — it makes platforms track and report who is moving what, where and how much, whether that’s exchanging tokens, cashing out or spending big.

As usual, though, there is a nuance. Gone are the days when crypto transactions were reported once a year. With CARF, tax transparency is becoming near-instant

CARF applies to what’s called reporting crypto-asset service providers — exchanges, brokers, ATM operators and even solo entrepreneurs who regularly help people move funds. For the first time in history, non-custodial services and DEXs are on the hook, too

All jurisdictions joining CARF must pass domestic legislation a calendar year before reporting occurs. The EU member states must transpose these new rules into national legislation by the end of 2025 so that most provisions become effective starting Jan. 1, 2026

For crypto service providers, the direction is crystal clear: platforms that used to ignore reporting now have to build it in. It’s subtle, but it sticks.

Crypto is moving from the edges of the system into the system itself, bringing in more checks, records and accountability. CARF doesn’t slam the door shut, but it does make sure someone’s watching the hallway.

A real stress test for crypto

For years, crypto operated in a gray zone. Not illegal, just unobserved. CARF is finally bringing some structure to the market that has grown too big to stay in the dark

At the end of the day, global tax evasion still drains around $427 billion a year from public coffers. With so much value moving fast and quietly, regulators saw a black hole, and CARF is their answer

Yes, the framework erodes the core appeal of crypto, but let’s not sugarcoat it. CARF doesn’t kill innovation. CARF lays the foundation for something the industry has long sought; it enables legitimacy

Related: Switzerland greenlights sharing crypto tax info with 74 nations

Institutional players have been wary of entering crypto markets in part because of regulatory uncertainty. A standardized, global reporting reduces that caution. Not to mention, the big capital participation helps stabilize price volatility.

For everyday users, CARF will ultimately make tax reporting as easy as pie. Once platforms share transactional data automatically to tax authorities, crypto people will spend less time tracking gains, losses and liabilities manually.

Crypto is growing up, and that comes with tradeoffs. Some old freedoms won’t feel quite the same: platforms will start to ask questions, some processes will get longer and some wallets will feel a little less invisible. But that doesn’t mean it’s the end

No one’s shutting off access or banning crypto services. New expectations are settling in: about what platforms need to collect, what gets flagged, what gets stored and what gets shared. It’s about whether the space can stay true to what made it powerful while learning to live with rules.

Preparing for an inevitable reality

The upfront compliance burden will be heavy for platforms. Legal advice, infrastructure, and staff training all take sufficient financial injections. It will come as no shock if providers inflate user fees, at least at first, to reimburse these costs.

Some platforms may even restrict services in jurisdictions with early adoption timelines or exit markets altogether. In the medium to long run, however, CARF may accelerate the industry’s professionalization.

Legal clarity will invite multi-year investment. Users will benefit from stronger protections. Providers embracing the framework now will see a competitive advantage.

Those who didn’t think about transparency might start to check if their go-to platforms are CARF-aware, keep detailed transaction records and seek guidance from crypto-native tax advisers. Even crypto veterans are not immune to unpleasant surprises when disputes arise and audits begin

Opinion by: Alice Frei, head of security and compliance at Outset PR.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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