The post UK Crypto Users Face Stricter Rules as KYC Concerns Grow appeared on BitcoinEthereumNews.com.

The UK mandates detailed crypto user data collection starting 2026. Trust in KYC processes declines amid inconsistent verification practices. Regulators seek to balance tax enforcement with user privacy concerns. The United Kingdom is set to implement stringent regulations requiring cryptocurrency firms to collect and report detailed personal data from users, starting January 1, 2026. This move by Her Majesty’s Revenue and Customs (HMRC) aims to curb tax evasion in the rapidly growing digital asset sector. According to the upcoming rules, crypto platforms in the UK will be required to collect detailed information from their clients. These include names, addresses, date of birth, and national insurance number or foreign tax identification number. Besides, companies that handle cryptocurrencies must also submit company information. Transactions will be tracked and reported to HMRC in order to trace unpaid capital gains or income tax on cryptocurrency proceeds. Platforms that do not report complete and accurate information could be fined up to £300 for every user. This reflects wider efforts to crack down on tax evasion in the digital age, such as HMRC’s targeting of earnings from platforms like Airbnb. Declining Trust in KYC Processes The timing of these laws comes amid increasing skepticism about Know Your Customer (KYC) processes in the cryptocurrency sector. A new survey carried out by SmartSearch indicated that a mere 17% of UK cryptocurrency companies carry out regular verification of new clients, while 50% do it from time to time. This failure to strictly verify raises doubts about the ability of KYC to successfully curb criminal activity. Besides that, in Hamilton’s lived experience, further experiences have cast shadows and reduced confidence in KYC. For example, the 2020 data breach at Ledger resulted in the exposure of personal information of many users, which were subsequently used for phishing attacks and other threats…

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Filed under: News - @ May 24, 2025 5:25 pm