Michaela
The UK’s tax authority, HM Revenue & Customs (HMRC), has reportedly issued 65,000 warning letters to crypto investors suspected of underreporting or evading taxes on their digital asset holdings, signaling an escalation in the government’s oversight of the crypto market.
Key point:
- HMRC has sent 65,000 warning letters to crypto investors suspected of underreporting or evading taxes, marking a major escalation in enforcement.
- Beginning in 2026, the UK will adopt the global Crypto-Asset Reporting Framework, requiring exchanges to share user and transaction data with tax authorities.
- The UK’s action reflects a wider international push for stronger crypto tax compliance and greater transparency in digital asset reporting.
According to a report by the Financial Times, data obtained through a Freedom of Information request by accounting firm UHY Hacker Young revealed a 134% surge in warning notices issued by the HMRC. These so-called “nudge letters” are typically sent ahead of formal investigations, urging crypto investors to review their tax filings and address any unpaid liabilities related to crypto holdings.
The information cited by HMRC was sourced directly from cryptocurrency exchanges, marking an early step in the agency’s expanding access to digital asset data. Beginning in January 2026, HMRC is set to gain broader oversight through the Crypto-Asset Reporting Framework (CARF), a global initiative adopted by roughly 70 jurisdictions aimed at improving tax transparency in the crypto sector. Under the forthcoming CARF, crypto exchanges will be mandated to share user and transaction data with national tax authorities.
In the UK, most crypto assets are treated as investments, meaning that any sale, trade, or purchase involving digital currencies is considered a disposal subject to Capital Gains Tax (CGT). Meanwhile, crypto acquired through activities such as mining, staking, airdrops, or employment is categorized as income and taxed accordingly.
The UK joins a growing number of jurisdictions intensifying efforts to enforce crypto tax compliance. In August, authorities in Jeju City, the capital of South Korea’s Jeju Province, completed a wide-ranging probe into the digital asset holdings of suspected tax evaders, moving to recover unpaid taxes through the confiscation of cryptocurrencies.
Jeju City officials reviewed the digital asset portfolios of 2,962 individuals with tax debts exceeding 1 million won, collectively amounting to 19.7 billion won. The probe utilized data obtained from four major South Korean crypto exchanges, Upbit, Bithumb, Coinone, and Korbit.
Following the review, authorities identified 49 individuals holding a combined 230 million won in virtual assets and have since moved to seize the funds by designating the exchanges as third-party debtors.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
