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…