Implementing CARF? Here’s How Tax Authorities Can Gain Visibility Into the Crypto Economy

In April 2021, the G20 mandated the OECD to develop a framework providing for the automatic exchange of tax-relevant information on Crypto-Assets. In August 2022, the OECD approved the Crypto-Asset Reporting Framework (CARF) which provides for the reporting of tax information on transactions in Crypto-Assets in a standardized manner, with a view to automatically exchanging such information. Sixty-nine jurisdictions have committed to implementing CARF by 2028, and some EU countries have already published draft bills to implement this into law. As crypto adoption accelerates, the CARF is poised to reshape how tax authorities around the world track, verify, and enforce the taxation of digital assets. From Bitcoin to tokens to NFTs, the era of anonymous trading is ending. Tax authorities are now expected to enforce transparent reporting requirements across crypto platforms and individual users.

But here’s the challenge: even with CARF mandates in place, many of the most critical questions remain unanswered by broker-submitted data alone: Who is behind this wallet address? How much income is declared? How do authorities identify all digital assets a taxpayer owns for capital gains calculations? Who are the Crypto-asset exchanges and service providers operating in your jurisdiction and is that merchant even registered?

That’s where IVIX comes in.

What Is CARF, And Why It Matters

Similar to the Common Reporting Standard (CRS) developed by the OECD in response to a request by the G20, the CARF establishes a global standard for the automatic exchange of information on crypto-asset transactions between tax jurisdictions. Under CARF, crypto-asset service providers (CASPs) including exchanges, brokers, and custodial wallet platforms must report:

• Verified customer identity and tax residency
• Crypto sales, swaps, and merchant payments
• Transfers to and from non-custodial wallets
• Aggregated activity across all supported digital assets

CARF is expected to take effect across 52 jurisdictions, including the UK, EU, and parts of Asia and Latin America, by 2027, and another 17 jurisdictions, including the US, by 2028. Below is a breakdown of these core reporting obligations and how IVIX can help authorities address each one:

1. Customer Identity & Tax Residency (KYC Verification): CASPs must collect and report verified customer identity and residency. The challenge here is that many platforms permit pseudonymous onboarding or submit incomplete KYC data. 

How IVIX helps: 

• Enriches crypto wallet address attribution using open-source intelligence (OSINT), business registration records, and digital footprint analysis. 
• Identifies discrepancies between declared taxpayer information and observed crypto behavior.

Use Case: A taxpayer declares minimal crypto income but is linked to a high-volume wallet address or NFT storefront. IVIX flags the discrepancy and connects the activity to a verifiable identity.

2. Transfers to and from Non-Custodial Wallets: CASPs must report transfers to and from private, self-hosted wallets. However, identifying the owner or use of self-custodied wallets is often difficult. How IVIX helps: 

• Tracks wallet address activity across on-chain dimensions. 
• Links wallet addresses and corresponding social media and OSINT activity
• Flags suspicious wallet linkages and usage patterns.

Use Case: A wallet address receives repeated deposits from a domestic exchange, then transfers funds to a foreign DeFi platform. After tax authorities have identified the wallet owner, IVIX can identify additional potential economic activity by that individual in other digital areas, such as eCommerce platforms, short-term rentals, social media, and more. 

3. Aggregation and Multi-Jurisdictional Reporting: CASPS must facilitate seamless data exchange and visibility across borders. In reality, taxpayers frequently use multiple CASPs across different jurisdictions, fragmenting the reporting trail. How IVIX helps:

• Resolves entities across wallets and platforms using web-based attribution and OSINT. 
• Consolidates fragmented digital activity  data into a unified picture 

Use Case: A trader routes funds through exchanges in several countries. IVIX technology can detect the user behind the wallet address, and provide authorities the necessary information to be able to trace the exchanges used by that trader.  Thus, allowing tax authorities to proactively identify and request crypto exchange activity logs from those identified exchanges either via the taxpayer or through a legal request. 

IVIX as the Investigative Intelligence Layer for CARF

CARF provides the reporting infrastructure, but enforcement depends on insight. IVIX serves as the investigative layer that enables tax authorities to:

• Attribute wallet addresses to real individuals and businesses
• Prioritize enforcement by documenting the "who," "where," and "how much"
• Detect undeclared or underreported crypto income
• Independently corroborate  exchange-reported data via on-chain activity

By combining on-chain analysis with off-chain intelligence, IVIX delivers the full-spectrum visibility and enforcement capability required to close the digital asset tax gap.

Whether you’re a tax authority in the UK, Canada, Israel, or the EU, IVIX offers discovery of unknown crypto users and crypto service providers, real-world attribution of wallet and platform activity, and integration-ready intelligence for audit and compliance platforms. Our systems are privacy-conscious, scalable, and fully aligned with global data governance standards.  IVIX's platform transforms raw data into pre-vetted, documented cases, ranked by potential tax impact. This allows tax authorities to prioritize high-value non-compliance cases for audit and investigation. It provides the supporting internet data and analysis needed for investigations, streamlining the process for tax agents.

Final Thought

CARF is the future of crypto tax enforcement. But enforcement won’t succeed with declarations alone. It requires actionable intelligence and investigative precision. IVIX delivers that intelligence. We empower tax authorities to bring crypto assets into the tax net – clearly, confidently, and comprehensively.

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Understand the basics of crypto tax enforcement in our blog on Crypto 101. Learn the latest strategies for solving crypto audits and investigations in our blog on Tax Compliance for Digital Assets.