As the United Kingdom prepares to tighten its grip on the crypto sector, new regulations will soon require crypto firms to collect and report detailed user data on every transaction — a move coming just as trust in digital platforms’ ability to safeguard personal information faces fresh scrutiny.
Starting January 1, 2026, all crypto businesses operating in the U.K. must keep comprehensive records on every customer and every transfer of digital assets. Announced by HM Revenue and Customs on May 14, the new rules mandate firms to gather full names, home addresses, dates of birth, and tax identification numbers for every individual using their services. Business clients, including companies and charities, must provide legal names, addresses, and registration details. Even routine wallet-to-wallet transfers will be covered by the reporting requirements.
This sweeping regulation is part of a global trend toward greater transparency and oversight in crypto, building on international standards but going further by enforcing the rules on all domestic transactions. Companies will have to file annual reports and risk fines of up to £300 ($398) per user if they fail to comply.
Authorities say the changes are about protecting consumers and aligning the sector with global standards such as Europe’s MiCA regulations. HMRC has advised crypto companies to start preparing for compliance now to avoid a scramble as the 2026 deadline approaches.
Mark Aruliah, head of EMEA policy at blockchain analytics firm Elliptic, called the move an “expected next step” for a maturing industry. He noted that while additional compliance costs will be a challenge, especially for startups, the new obligations mirror those in traditional finance and may help foster new reporting services.
“Reporting of personal transaction data has historically been a challenge for the industry and for consumers. This clarity on legal obligations to reporting will help and also the growth of new reporting services.”
However, many critics say the bigger concern is not data collection — but data security. The risks became all too real recently, as major U.S. crypto exchange Coinbase confirmed a data breach involving customer information. Attackers bribed overseas contractors to gain access to names, emails, phone numbers, addresses, and in some cases, partial Social Security numbers and even ID documents. Although Coinbase says less than 1% of users were affected, with millions of monthly active customers, the breach highlights how vulnerable sensitive data can be.
The incident arrives just as U.K. authorities are preparing to require crypto firms to collect even more personal information. The timing has sparked debate over whether the industry is equipped to keep such data safe, as expectations for both transparency and security rise in tandem.
