UK crypto users face more strict rules as KYC concerns grow
- As of 2026, the UK requires detailed crypto user data collection.
- Trust in KYC processes decreases between inconsistent verification practices.
- Regulators try to balance tax implementation with user privacy concerns.
The UK is preparing to implement solid regulations that require crypto currency companies to collect and report detailed personal data from users from 1 January 2026. With the Revenues and Customs of Majesty (HMRC), this movement aims to prevent tax smuggling in the rapidly growing digital asset sector.
According to the upcoming rules, the crypto platforms in the UK will be asked to collect detailed information from their customers. These include names, addresses, date of birth and national insurance number or foreign tax identification number. In addition, companies that manage crypto currencies should provide company information. In the crypto currency income, transactions will be monitored to monitor unpaid capital gains or income tax and will be notified to HMRC.
Platforms that do not report full and accurate information can be fined up to £ 300 for each user. This reflects its efforts to reduce tax trafficking in the digital age, such as HMRC’s aiming for earnings from platforms such as Airbnb.
Trusting KYC processes
The timing of these laws stems from the increase in skepticism in recognizing your customers (KYC) processes in the crypto currency sector. A new survey conducted by Smartsearch showed that only 17% of the UK crypto currency companies were regularly verified by new customers, and 50% of them did from time to time. The absolutely inability to be verified arouses doubt about KYC’s ability to successfully block criminal activities.
In addition, in Hamilton’s experience, more experience has reduced the confidence in shadows and KYC. For example, the 2020 data violation in Ledger resulted in exposure to the personal information of many users used for identity hunting attacks and other threats for safety.
While the United Kingdom government thinks that it is necessary to enforce arrangements to guarantee market integrity and protect consumers, the confidentiality advocates are afraid of abuse of data collected. Crypto Wallets It shows an effort to balance regulatory needs with the right to individual privacy.
. Financial behavior authority (FCA) sees the value of transparent regulations in creating a safe and competitive crypto industry. However, the user also sees difficulties in having measures that do not violate or suppress innovations.
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