In spring 2024, the European Union (EU) rolled out a comprehensive set of anti-money laundering (AML) regulations, marking a major shift in its approach to financial crime prevention. At the center of this effort is the newly established Anti-Money Laundering Authority (AMLA), based in Frankfurt. This new body is tasked with harmonizing AML strategies across member states—particularly in response to growing concerns over the misuse of crypto assets for illicit activities.
At the same time, the Organization for Economic Cooperation and Development (OECD) launched the Crypto-Asset Reporting Framework (CARF), aimed at combating tax evasion in the digital asset space. CARF builds on the existing Common Reporting Standard (CRS) and is scheduled for implementation in 2026. Within the EU, CARF will be adopted through the eighth version of the Directive on Administrative Cooperation, known as DAC8.
Together, these regulatory initiatives are designed to boost transparency in crypto markets and establish a unified compliance structure. This is no small feat—data from Chainalysis reveals that nearly $100 billion in crypto has flowed from illicit wallets to off-ramping services over the last six years. While these regulatory efforts signal progress, they also create new hurdles for businesses operating in the crypto space. Non-compliance can result in fines, severed banking relationships, or even exclusion from key financial markets.
Toward a Transparent Crypto Ecosystem
A common misconception in the industry is that CARF is purely a tax-focused regulation. In reality, it is an information-sharing framework that closely mirrors AML principles. So far, 66 countries have pledged to participate—not only to monitor their residents’ crypto activity, but also to shape the global regulatory agenda.
CARF mandates the automatic exchange of tax-relevant information among participating countries, granting authorities cross-border visibility into crypto transactions. However, while AML units are often equipped to handle large datasets, many tax agencies lack the resources and systems to process this influx of information effectively.
Because digital assets are inherently global and users often operate across multiple platforms, enforcement without standardized data sharing is nearly impossible. Complicating matters further, many major exchanges are registered in smaller jurisdictions. Take Austria, for example: it is expected to handle a disproportionately large volume of crypto transaction reports relative to its population, making early preparation essential for both regulators and businesses.
Getting Ahead of Compliance
To navigate these regulatory changes, enterprises must begin preparing now. This includes establishing processes for collecting and verifying tax information from both current and new users—well before CARF goes live in January 2026. If a customer does not provide the required data within 90 days, their account must be restricted, or the business could face penalties.
User education is also crucial. Many crypto holders wrongly assume they are exempt from reporting requirements if they haven’t converted their assets into fiat currency. Businesses should proactively notify users of upcoming changes and the need to provide tax identification numbers.
Enterprises must also be ready to aggregate and report transaction data by asset type to local tax authorities. Without a solid data collection system in place from the start, companies risk falling back on expensive and inefficient retroactive reconciliation.
The most effective way to manage this is through purpose-built technology. Businesses should invest in platforms that allow AML and finance teams to collaborate seamlessly. Automated sub-ledger systems and scalable reporting tools will be key to staying ahead of regulatory demands.
Looking Forward
As the EU and UK push forward with new AML and CARF regulations, the crypto landscape is undergoing a fundamental transformation. While these rules are designed to increase transparency and reduce financial crime, they also demand a higher level of operational readiness from digital asset companies.
With the clock ticking toward 2026, the time to act is now. Implementing robust compliance systems and embracing automation will not only ensure regulatory alignment but also give businesses a competitive edge. Those that treat compliance as a strategic priority—rather than a reactive obligation—will be best equipped to thrive in this new era of crypto regulation.
