EU Tightens Crypto Oversight: Exchanges and Brokers to Report Detailed User Data

The European Union is stepping up its oversight of digital assets, requiring crypto exchanges, brokers, and other crypto-asset service providers to collect and transmit detailed user and transaction information to national tax authorities. This new requirement, part of the DAC8 directive, is designed to close loopholes in tax reporting and bolster enforcement against financial crime in the crypto sector.

From next January, crypto firms across the EU will need to implement robust reporting systems, enhanced customer due diligence processes, and internal compliance controls. Authorities aim to gain a clearer view of crypto holdings, trades, and transfers, similar to the transparency already applied to bank accounts and securities. Firms that fail to comply could face penalties under national laws, and authorities may seize crypto assets linked to unpaid taxes, even when the assets reside outside the taxpayer’s home country.

The DAC8 initiative works alongside other EU regulations such as the Markets in Crypto-Assets (MiCA) framework, which governs licensing, customer protection, and market conduct. While MiCA ensures that firms operate legally and responsibly, DAC8 focuses on tax compliance and reporting obligations, creating a comprehensive regulatory environment for the digital asset ecosystem.

Enforcement will involve close cooperation between EU member states, enabling authorities to track cross-border crypto flows more effectively and prevent evasion. For crypto users, this means that previously opaque transactions are now traceable, and digital assets will increasingly be treated as reportable property under tax law.

The move reflects a broader trend of tightening scrutiny over the rapidly expanding digital asset market. Law enforcement agencies and financial regulators are seeking to integrate crypto compliance into standard financial oversight, ensuring transparency, reducing fraud risks, and safeguarding the integrity of both national and cross-border financial systems.

As the crypto sector matures, exchanges, brokers, and service providers must adapt to heightened legal obligations, turning regulatory compliance into a core part of operational strategy and risk management. The new reporting rules signal that the EU is serious about closing gaps in oversight while fostering a more secure digital finance environment.