How Crypto Funds and Service Providers Can Prepare for CARF, CRS 2.0 & DAC8 Reporting

Quick Read

• Timelines: EU-based firms (under DAC8) and 48 first-wave jurisdictions began mandatory data collection on 1 January 2026 ahead of initial reporting exchanges in 2027. Second-wave jurisdictions follow with mandatory data recording starting 1 January 2027 and first reporting due in 2028.  

• Classification: Firms must review entity structure to determine how DAC8, CARF and CRS 2.0 overlap across different jurisdictions.  

• Data Gathering: Systems require an upgrade to accurately capture client profiles, validate TINs and track complex transaction data, including asset exchanges, transfers and retail payments.  

• Governance: Establish clear ownership across Compliance, Tax and IT, backed by dry-run reporting tests before the implementation dates. 

As global tax transparency is fast expanding into the digital asset space, new regulatory standards are reshaping compliance obligations. Driven by frameworks like the OECD’s CARF, updated CRS guidelines and the EU’s DAC8 directive, crypto funds and service providers must adapt to significantly stricter reporting requirements.  

Operating in a decentralised space no longer protects firms from traditional tax reporting. To help you prepare for CARF, CRS 2.0 and DAC8 requirements, here is a practical roadmap that covers entity classification, data mapping and effective governance ahead of the impending deadlines.  

Regulatory Landscape: How Do CARF and CRS 2.0 Differ?

Although both frameworks target tax evasion, their scopes differ significantly, demanding distinct compliance strategies and operational workflows.  

• CARF (Crypto-Asset Reporting Framework): Purpose-built for digital asset markets, CARF introduces reporting requirements to Crypto-Asset Service Providers (CASPs), including exchanges, brokers and ATM operators. Entities must report gross transaction proceeds from crypto transactions, wallet transfers and relevant retail payments.  

• CRS 2.0: An update to the existing Common Reporting Standard, CRS 2.0 widens the scope of Financial Institutions and Financial Assets to systematically cover digital money products and Central Bank Digital Currencies (CBDCs).  

• The Overlap: Dual classification poses a key operational challenge, as a crypto fund might classify as a CRS 2.0 Investment Entity while simultaneously operating as CASPs under CARF. While the OECD introduced rules to prevent duplicate reporting, firms remain responsible for identifying which framework applies to which asset and transaction. 

DAC8 serves as the EU’s framework for CARF principles, aligning closely with the Markets in Crypto-Assets (MiCA) standards. EU-based crypto providers, alongside 48 first-wave CARF jurisdictions like the Cayman Islands, Ireland, Luxembourg and the UK, face immediate compliance obligations, as due diligence and data collection rules went live on 1 January 2026, ahead of the first official reporting exchanges in 2027. Meanwhile, for second-wave jurisdictions, such as the UAE, BVI, Hong Kong and Switzerland, mandatory data recording is set to begin on 1 January 2027, with exchanges following in 2028.  

How Do Crypto Funds Prepare for Their First CARF Filings?

1. Entity Classification and Jurisdictional Footprint

The foundational step in achieving readiness is establishing entity status under both regimes. Fund managers must determine if their vehicle qualifies as an Investment Entity under CRS 2.0, an RCASP under CARF or is subject to dual classification. Given that fund structures are often domiciled in one jurisdiction while managers, service providers and investors operate across different locations, firms must carefully analyse domestic legislative nuances to avoid misclassification or missed filings.  

2. Upgrading Onboarding Protocols

Ahead of reporting obligations, funds must immediately update their investor onboarding workflows to prepare for initial filings. Self-Certification forms must be updated to capture mandatory CARF-specific data fields to ensure that every investor is properly documented.  

What Data Will Crypto-Asset Service Providers Need for CARF and DAC8 Reporting?

Compliance under these new regulatory frameworks requires far more than standard blockchain ledger data. CASPs now face the challenge of connecting anonymous, on-chain transactions to verified, real-world identities. 

Client and Controlling-Person Data

Regulatory compliance demands total alignment between KYC/AML data and tax reporting. For corporate clients, service providers must look through entity structures to identify Ultimate Beneficial Owners (Controlling Persons) and disclose their specific tax jurisdictions.  

Tax Identification Number (TIN) Validation

DAC8 and CARF require firms to validate TIN format correlates with the declared tax residency, as failing to flag invalid or missing TINs triggers a regulatory audit.  

Transaction-Data Mapping

CASPs must capture and categorise high-volume transaction data in real time, calculating the fiat value at the exact time of execution.  

Key data points include:  

• Gross proceeds from crypto-to-fiat exchanges. 

• Gross proceeds from crypto-to-crypto exchanges. 

• Crypto-asset transfers to external wallets. 

• Retail payment transactions processed on behalf of merchants. 

What Governance and Reporting Controls Should Firms Establish Before Implementation?

Establish Cross-Functional Governance Ownership

Crypto tax reporting requires explicit ownership to ensure accountability. Firms must establish a cross-functional steering committee, including:  

• Compliance/AML: To manage KYC/KYB protocols and identify controlling-person data. 

• Tax/Legal: To monitor shifting jurisdictional reporting deadlines and handle entity classifications. 

• IT/Operations: To develop the automated tools, APIs and data pipelines to extract transaction histories.  

Execute Dry-Run Reporting

Proactive testing is essential for regulatory readiness and mitigating operational risk. Firms must run end-to-end simulations on their 2026 data to identify unverified counterparties, invalid TIN formats and missing self-certifications before closing out the year. Early testing reveals critical systemic risks, including missing TINs, unclassified asset transfers and conversion rate discrepancies, making Q4 2026 the ideal window for data remediation ahead of 2027 enforcement deadlines.  

Ready to Future-Proof Your Compliance?

Is your crypto fund ready for 2027? You don’t have to navigate these complex tax transparency frameworks alone. As a global corporate and fund administration provider, Bolder Group is here to help you future-proof your operations. 

Let our compliance team conduct a full readiness assessment and ensure your crypto fund is fully prepared for the 2027 reporting deadlines. Reach out to your local Bolder representative today to get started.