From January 1, 2026, DAC8 will force crypto platforms serving EU users to collect KYC and transaction data on transactions and withdrawals, including for wallet self-custody.
Summary
- From January 1, 2026, the EU DAC8 rules will require crypto asset service providers to collect user identities, tax IDs and detailed transaction histories for EU taxpayers.
- The reporting includes crypto-fiat transactions, crypto-crypto swaps and withdrawals to external addresses, bringing self-managed destinations within the limits of tax reporting.
- Platforms can freeze accounts after two reminders and a 60-day grace period if users do not provide a tax identification number. The first full annual reports must be published in 2027.
Cryptocurrency companies operating in the European Union began collecting tax data under the bloc’s new DAC8 rules on January 1, 2026, sparking debate over the privacy implications for digital asset users.
EU creates new rules for wallets
The regulations, implemented through Directive (EU) 2023/2226, require exchanges and service providers to report user information to national tax authorities, including names, tax identification numbers and transaction history, according to the European Commission framework.
Crypto commentator Blockchainchick posted an overview of the DAC8 launch on social media platform X, sparking debate among industry observers. Some commentators have characterized the regulations as an end to anonymous cryptocurrency transactions, although analysts note that the rules introduce structured reporting rather than immediate enforcement action.
Under this framework, digital asset service providers are required to collect customer data throughout 2026 and submit the first full annual reports by 2027. The regulations focus on building systems and collecting data by 2026, with greater enforcement impacts expected later once reports can be compared across borders, regulatory observers said.
The rules apply to all EU residents and cover crypto-to-fiat transactions, crypto-to-crypto exchanges and transfers. The definition of transfers also includes withdrawals to addresses not managed by the same provider, meaning self-managed wallets and unhosted destinations fall within the reporting scope, European Parliament research shows.
Platforms may be required to freeze accounts or block transactions if users do not provide their tax identification number, although blocking accounts will follow two reminders and a 60-day period rather than an immediate freeze, according to the directive.
The European Commission estimates that DAC8 could generate around €1.7 billion in additional annual revenue from crypto transactions, while the European Parliament cites a broader range of €1 billion to €2.4 billion per year. According to Commission impact assessments, providers could face around €259 million in one-off start-up costs and roughly €22.6 million to €24 million in recurring annual costs.
The European Commission’s impact assessment describes a balanced approach, allowing aggregated data in parts of the report, while standardized identity and account fields enable cross-border matching. According to the directive text, the framework increases the visibility of taxes rather than prohibiting self-monitoring.
Reporting takes place annually and the regulation focuses on crypto asset service providers and their EU-based users. Activity that originates with a regulated provider, including withdrawals to self-custody wallets, is now within the scope of regulatory reporting, according to the framework.
