White House Proposes New Rules to Track Offshore Crypto Holdings for Tax Compliance

The U.S. government is advancing regulations to monitor Americans' offshore cryptocurrency holdings, aiming to enhance tax transparency. The proposed rules, part of the Crypto-Asset Reporting Framework (CARF), empower the IRS to access foreign crypto transaction data. This move aligns the U.S. with global standards already adopted by nations like Japan, Germany, and the UAE.

CARF, developed by the OECD, facilitates cross-border information sharing to combat tax evasion. The framework excludes decentralized finance (DeFi) from stringent reporting requirements, focusing instead on centralized crypto activities. The Treasury Department has submitted the proposal to the White House, signaling a commitment to fairer crypto markets.

Market participants anticipate potential Ripple effects across exchanges and asset classes as compliance mechanisms evolve. The initiative reflects growing institutional scrutiny of digital assets while attempting to balance oversight with innovation.