What happened?
HM Revenue & Customs sent 65,000 “nudge letters” to people suspected of underreporting or evading crypto taxes, more than double last year. These warnings rely on data pulled from crypto exchanges and foreshadow broader information sharing under the global CARF rules coming in 2026. At the same time the UK raised crypto capital gains rates for many taxpayers and lifted a ban on crypto exchange-traded notes, showing both tougher enforcement and greater market integration.
Who does this affect?
Retail investors who buy, sell, swap or earn crypto and might not have reported disposals or income are directly in the firing line. Crypto exchanges and platforms will face more reporting obligations, while asset managers and institutional players preparing ETNs or tokenized products will need to adjust compliance processes. Miners, stakers, high earners receiving crypto as income, and even overseas traders are affected because governments are sharing data internationally.
Why does this matter?
Tighter data-sharing and enforcement will push up compliance costs and likely reduce opportunities for tax-motivated trading or undeclared gains. In the near term that could pressure retail activity, but clearer rules plus new ETN listings and tokenization plans may attract more institutional money and boost liquidity over time. Overall, enforcement plus market modernization could shrink shady activity while making crypto more investable for mainstream investors — analysts suggest ETNs alone might lift domestic activity by around 20%.