US Treasury Pushes Crypto Asset Reporting Framework: Global Compliance Target Set for 2027
The US Treasury isn't asking—it's demanding. By 2027, the hammer drops on crypto compliance worldwide. No more shadows, no more 'creative' accounting.
The New Rules of the Game
Forget decentralization fantasies. Governments want ledgers—auditable, transparent, and stamped with bureaucratic approval. The Treasury's framework isn't a suggestion—it's a blueprint for global enforcement.
Wall Street's Worst Nightmare
Traditional finance spent years lobbying against crypto. Now they'll spend millions complying with the very system they tried to kill. Irony tastes like overpriced compliance consultants.
The countdown to 2027 starts now. Adapt or get left behind—regulators aren't in the mood for exceptions.
New Crypto Reporting Standards
The essence of CARF is straightforward: it requires all participating nations to mandate that crypto exchanges and service providers—referred to as VIRTUAL Asset Service Providers (VASPs)—collect extensive data about their users.
This includes full Know Your Customer (KYC) information, due diligence data, tax residency details, and tax identification numbers. Subsequently, each exchange must report this data to the users’ home countries at the end of every year.
For US taxpayers utilizing platforms like Binance, Kraken, Bybit, Bitstamp, or OKX—entities operating within the boundaries of CARF—the implications are clear: these crypto exchanges will automatically relay users’ activity to the Internal Revenue Service (IRS).
Donnelly described CARF as the crypto equivalent of the Common Reporting Standard (CRS), a regulatory framework that governs how banks share account balances globally.
While the US opted out of CRS, instead creating the Foreign Account Tax Compliance Act (FATCA), the current initiative suggests a shift toward incorporating CARF into progressive US crypto regulations.
IRS To Receive Direct CARF Reports
According to Donnelly’s assessment, the significance of CARF lies not just in reporting sales, but in tracking all transactions, including exchanges and transfers.
Notably, CARF mandates the reporting of both sending and receiving wallet addresses for transfers. This indicates a new oversight mechanism that ensures no transaction goes unnoticed.
Donnelly emphasized a key difference in reporting: while 1099-DAs from US companies are directly sent to the taxpayer, CARF reports will not be shared with individuals.
Instead, these reports go directly to the IRS, which will utilize advanced data analysis tools, such as those developed by Palantir, to compare reported activity against individual taxpayer submissions.
As a result, individuals who fail to accurately disclose their crypto activities may very well find themselves facing audits. Full enforcement of the Crypto Asset Reporting Framework is set to commence in 2027, a timeline that Donnelly views as imminent.
However, for many, this could be seen as an invasion of crypto investors’ privacy. It remains to be seen whether the review by WHITE House officials could pass without any requirements from industry leaders.
As of this writing, the market’s leading cryptocurrency, Bitcoin (BTC), has recaptured the $90,000 level following last week’s crash, which saw BTC fall all the way to $80,000 for the first time since April of this year.
Featured image from DALL-E, chart from TradingView.com
