CARF requires transactions to be valued at fair market value in fiat currency. This guide covers approved methodologies, pricing sources, and implementation considerations for accurate valuation.
Valuation Requirements
Fair market value must:
- Be determined at transaction time
- Be expressed in fiat currency
- Use consistent methodology
- Be supportable with documentation
Pricing Sources
Internal Prices
Use the CASP's own trading prices where the transaction occurred on the platform.
External Price Feeds
For crypto-to-crypto trades or transfers, use reputable price aggregators:
- CoinGecko
- CoinMarketCap
- Exchange-specific APIs
Volume-Weighted Prices
Consider volume-weighted average prices for better accuracy, especially for large transactions.
Whatever methodology you choose, apply it consistently across all transactions. Document your methodology and be prepared to explain it to regulators.
Methodology Selection
Choose methodology based on:
- Asset liquidity
- Transaction type
- Available data sources
- Consistency requirements
Special Cases
Illiquid Assets
Use last available price or comparable asset pricing.
New Tokens
Use initial offering price or first trading price.
Stablecoins
Generally value at par (1:1 with pegged currency).
For stablecoins that depeg, use actual market price at transaction time, not the intended peg value.
Documentation
Maintain records of:
- Methodology selected
- Pricing sources used
- Calculation methodology
- Exception handling
Conclusion
Consistent, documented valuation methodology is essential. Choose appropriate sources and maintain clear records to support your valuations if questioned.
Automate CARF Compliance
Self-certification, TIN validation, transaction reporting, and XML generation for 76 jurisdictions.