Coinbase and other crypto exchanges are now facing new regulatory pressure in the United Kingdom. The UK tax authorities have announced new rules that require crypto firms to report exact user data and all transaction details starting January 1, 2026. If the firms do not comply, they could face heavy fines.
Meanwhile, the Securities and Exchange Commission (SEC) dropped a lawsuit against Coinbase last year but quietly launched another probe into how the company reported user growth. The SEC is questioning a number Coinbase once used to say it had over 100 million “verified users”, a figure it stopped using two years ago.
Now, the UK is demanding that crypto companies submit real, verifiable data about every customer, including legal name, address, tax ID, and every trade or transaction they make. It also applies to any company that handles UK customers, including international platforms like Coinbase. Now the exchange will have to maintain a record of all trades, transfers, and transactions of its UK users or else it will be fined.
This new rule falls in line with the Crypto Asset Reporting Framework (CARF), which is designed to prevent tax evasion and enhance transparency. The firms that fail to adhere to these regulations risk being fined up to £300 ($398.43) per user.
The officials have asked that firms should start collecting data now, even though the rules won’t be implemented until 2026. With this, the UK government is trying to ensure that crypto transactions are as transparent as traditional banking transactions.
Coinbase’s chief lawyer, Paul Grewal, called the SEC inquiry “a holdover” from the previous administration. He also confirmed that the company stopped using the user count metric over two and a half years ago. However, Coinbase is cooperating with the investigation but wants it to conclude as soon as possible.
According to Chancellor Rachel Reeves, this new rule will tighten up crypto regulations but still support the sector. In a speech during UK Fintech Week, Reeves said “Robust rules around crypto will boost investor confidence, support the growth of fintech, and protect people across the UK.”
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