CARF Reporting Obligations Explained

CARF imposes comprehensive reporting obligations on Crypto-Asset Service Providers. Understanding exactly what must be reported—and in what format—is essential for compliance planning and system design.

Reportable Transactions

CARF requires reporting of four categories of Relevant Transactions:

1. Crypto-to-Fiat Exchanges

Transactions where a user exchanges crypto-assets for fiat currency, including:

• Selling crypto for USD, EUR, or other fiat
• Converting crypto to fiat-backed stablecoins that qualify as e-money
• Using crypto to purchase fiat-denominated products

2. Crypto-to-Crypto Exchanges

Transactions where one crypto-asset is exchanged for another:

• Trading Bitcoin for Ethereum
• Swapping tokens on DEX aggregators via a CASP
• Converting between different stablecoins

3. Transfers of Relevant Crypto-Assets

Outbound transfers of crypto-assets to addresses not maintained by the reporting CASP:

• Withdrawals to personal wallets
• Transfers to other exchanges
• Transfers to third-party addresses

4. Reportable Retail Payment Transactions

Payments for goods or services where a CASP facilitates the payment and the merchant receives fiat currency:

• Crypto payment processor transactions above threshold
• Point-of-sale crypto payments converted to fiat

User Information Requirements

For each Reportable User, CASPs must report:

Individual Users

• Name: Full legal name as documented
• Address: Residence address including country
• Tax Jurisdiction(s): Country/ies of tax residence
• TIN(s): Taxpayer Identification Number for each tax jurisdiction
• Date of Birth: Required for all individuals
• Place of Birth: If TIN is not available

Entity Users

• Legal Name: Registered name of the entity
• Address: Principal business address
• Tax Jurisdiction: Jurisdiction of tax residence
• TIN: Entity tax identification number
• Controlling Persons: Identity information for controlling persons of passive entities

Transaction Data Elements

For each transaction type, specific data must be collected and reported:

Crypto-to-Fiat Exchanges

• Aggregate gross amount received in fiat currency
• Number of units of each crypto-asset type disposed
• Number of transactions

Crypto-to-Crypto Exchanges

• Aggregate fair market value (in fiat) of crypto received
• Aggregate fair market value (in fiat) of crypto disposed
• Number of units of each crypto-asset type (both sides)
• Number of transactions

Transfers

• Aggregate fair market value of crypto-assets transferred
• Number of units transferred by crypto-asset type
• Number of transfer transactions

Retail Payments

• Aggregate value of payments facilitated
• Number of transactions per merchant

Aggregation Rules

CARF allows aggregation of transaction data rather than reporting each individual transaction:

Aggregation Dimensions

• By User: Each report covers one user's activity
• By Transaction Type: Separate totals for each of the four types
• By Crypto-Asset Type: Breakdown by specific crypto-asset
• By Period: Annual reporting period (calendar year for most jurisdictions)

Fair Market Value Determination

For valuation purposes:

• Use the value at the time of transaction
• CASPs may use their own trading prices or reputable price feeds
• Consistent methodology must be applied
• Documentation of valuation methodology must be maintained

Reporting Deadlines

Timing requirements vary by jurisdiction but follow a general pattern:

• Reporting Period: Calendar year (January 1 - December 31)
• Report Submission: By end of Q2 following the reporting year (typically June 30)
• Information Exchange: Typically September 30 for automatic exchange between jurisdictions

Some jurisdictions may impose earlier deadlines. CASPs should verify specific requirements for each jurisdiction where they have obligations.

Record Retention

CASPs must maintain records supporting their reports:

• Retention Period: Typically 5-7 years depending on jurisdiction
• Documentation Required:
• Self-certification forms from users
• Due diligence documentation
• Transaction records
• Valuation methodology documentation
• Submitted reports
• Format: Records must be maintained in a format that allows reconstruction of reports

Conclusion

CARF reporting obligations are comprehensive and require CASPs to collect substantial information about users and transactions. Building systems that capture all required data points from the outset is far easier than retrofitting existing systems. Early planning and investment in compliance infrastructure will pay dividends as reporting deadlines approach.