The New OECD Crypto-Asset Reporting Framework

The Crypto-Asset Reporting Framework (CARF), adopted by the OECD, is the next step towards the Automatic Exchange of Information on Financial Accounts (AEOI). In fact, this framework, which is aligned with the Common Reporting Standard (CRS), requires comprehensive reporting for Crypto-Asset Service Providers (CASPs). As Switzerland has committed to implementing the CARF by January 1, 2026, Swiss CASPs should start looking at the upcoming reporting changes, including due diligence and annual reporting requirements, in order to be compliant at the time of their implementation.

Which crypto-assets are within the scope?

The term “crypto-asset” is broad and means a digital representation of value that relies on a cryptographically secured distributed ledger or similar technology to validate and secure transactions. The term “relevant crypto-asset” means any crypto-asset that is not a central bank digital currency, a specified electronic money product or any crypto-asset for which the reporting CASPs have adequately determined that it cannot be used for payment or investment purposes. In other words, only “relevant crypto-assets” fall within the scope of CARF. These include stablecoins, such as e-money tokens (EMTs) and asset-referenced tokens (ARTs), payment tokens, security tokens, and certain non-fungible tokens (NFTs).

Which crypto-asset service providers are within the scope?

The term “reporting crypto-asset service provider” means any individual or entity that, as a business, provides a service that facilitates either the exchange between relevant crypto-assets and fiat currencies or the exchange between one or more forms of relevant crypto-assets or the transfer of relevant crypto-assets for or on behalf of customers. This definition covers crypto custodians, brokers, dealers, and exchanges, as well as operators of crypto-asset automatic telling machines (ATMs). Banks will fall under the scope of the CARF if they offer crypto services to their customers in any form. Reporting CASPs must conduct due diligence to efficiently and reliably determine the identity and tax residence of their crypto-asset users.

What are the reporting requirements?

On this basis, CASPs must file an annual report for each crypto-asset user resident in a foreign partner jurisdiction that engages in exchange transactions, deposits, withdrawals, or payments involving crypto-assets. The report must include personal data such as name, address, jurisdiction(s) of residence, tax identification number(s) (TINs), and date and place of birth. In addition, aggregated data on all relevant transactions must be reported.

Conclusion and outlook

The CARF is intended to close gaps in the tax transparency mechanism and ensure that CASPs are treated in the same way as the traditional financial sector. The OECD initiative should therefore also be seen in the context of global regulatory efforts to prevent money laundering and terrorist financing through crypto-assets. As a result, the Federal Council believes that the implementation of the CARF will enhance Switzerland's progressive crypto-market regulation and contribute to the credibility and reputation of the Swiss financial center. However, as the CARF is a separate and complementary reporting framework, Swiss CASPs could be required to report under both the CRS and the CARF. In order to reduce unnecessarily costly and disproportionate reporting burdens, a particular attention has been paid to the efficient and frictionless interaction of the CARF with the CRS. As a result, the definition of relevant crypto-assets excludes specified electronic money products and central bank digital currencies from the scope of the CARF, as reporting on these assets is ensured under the CRS. Furthermore, indirect investments in relevant crypto-assets through traditional financial products, such as derivatives or interests in investments vehicles, are also covered by the CRS. Although the entry into application of the CARF may seem a long way off, Swiss CASPs should already familiarize themselves with this framework and closely monitor its implementation by the Swiss legislator. For Swiss CASPs wishing to operate in the EU, it may be worthwhile to read CARF in conjunction with the Markets in Crypto-Assets Regulation (MiCAR) and the transparency rules for crypto-asset transactions (DAC8) in order to meet the highest possible compliance standards internally.