The United Kingdom is cracking down on crypto firms, introducing new rules that will require them to collect and report detailed personal data on every crypto transaction. Starting on Jan. 1, 2026, crypto companies operating in the U.K. will need to keep track of every customer, transaction, and movement of crypto. This move is aimed at bringing transparency and accountability to an industry that has often been criticized for its lack of regulation.
HM Revenue and Customs announced the new regulations in a statement on May 14, stating that crypto firms must gather information such as full names, home addresses, dates of birth, and tax identification numbers from individual users. Companies, partnerships, and charities are also subject to these requirements, including providing legal business names, addresses, and registration numbers.
Every transaction, even those involving the transfer of crypto between wallets, must be recorded and reported. Failure to comply with the new rules could result in fines of up to £300 (approximately $398) per user. The U.K. government believes that these measures will help protect consumers and create a more robust regulatory environment in line with global standards.
Mark Aruliah, head of EMEA policy at blockchain analytics firm Elliptic, sees this move as a natural progression for the industry. He acknowledges that while smaller startups may face challenges in meeting these requirements, the push towards transparency is necessary and long overdue.
However, concerns about data security have been raised in light of a recent breach at cryptocurrency exchange Coinbase. The company confirmed that contractors working for Coinbase overseas were bribed by attackers, leading to a leak of sensitive customer information, including names, emails, phone numbers, addresses, and even partial Social Security numbers.
This breach has raised questions about whether crypto companies are equipped to handle the responsibility of collecting and safeguarding such personal data. If the U.K.’s new rules were already in place, Coinbase could be facing significant fines and reputational damage.
As the U.K. moves towards stricter regulations for the crypto industry, it is essential for companies to prioritize data security and compliance with these new requirements. The juxtaposition of these new rules with recent data breaches highlights the importance of safeguarding personal information in the rapidly evolving world of cryptocurrency.