Starting in 2026, crypto platforms covered by the OECD’s Crypto-Asset Reporting Framework, or CARF, must collect customer information and report relevant transactions to tax authorities. Chainalysis examined how much real-world crypto activity this new system could capture once reporting begins. Its August 26 study placed potentially taxable on-chain crypto activity above $457 billion for 2025 across six blockchains. Chainalysis found that CARF reaches only a fraction of that activity, because most of it never passes through a company required to report it.

What CARF is and why it exists

CARF creates a system for crypto tax reporting across participating countries. Crypto platforms with customers must collect identifying information and transaction records, send those records to tax authorities, and participating countries will later share the data internationally.

The basic idea resembles reporting that already exists in traditional finance. Banks and brokerages routinely send information about interest, dividends and stock sales to tax authorities. CARF extends a similar reporting model to covered crypto businesses.

Collection under CARF begins in 2026. Early participating countries expect to start exchanging CARF data internationally in 2027.

What Chainalysis measured

Chainalysis studied activity on Bitcoin, Ethereum, Solana, Tron, BNB Smart Chain and Base. Its model counted estimated realized gains, meaning profits generated when assets change hands at a higher value, along with income from mining, staking, lending and gambling. It counted crypto payments for goods and services as a separate part of the total.

The company assigned activity to countries using direct location signals and proportional estimates based on services used in each market. The United States accounted for $112.6 billion, followed by Germany at $24.1 billion. China reached $21 billion, the UK $19.4 billion, India $19 billion and Brazil $16.1 billion.

These figures describe potentially taxable activity, not taxes owed. Tax treatment varies by country, and some transactions can qualify for exemptions or create no liability. A transfer between wallets controlled by the same person, for example, does not automatically create a taxable gain.

Chainalysis could not capture trading, staking or lending that remained inside centralized exchanges because those records never reached public blockchains. Centralized exchanges are companies that hold customer assets and process trades on their own systems. CARF is best positioned to capture activity on those platforms, even though Chainalysis could not measure that activity on-chain.

For that reason, Chainalysis describes $457 billion as a lower boundary for the activity covered by its model.

Why CARF only catches 14% of it

CARF depends on a company sitting between the customer and the transaction. A centralized exchange can identify its customer and record what the customer buys or sells, which gives the company information it can send to a tax authority.

Much on-chain activity works differently. A peer-to-peer transfer moves crypto directly between users. A decentralized exchange, or DEX, lets users trade through blockchain-based software without a conventional exchange company handling the trade. Self-custody means a user controls a crypto wallet directly without relying on a company to hold the assets. Decentralized finance, or DeFi, refers to blockchain-based financial services that operate through software rather than a conventional financial intermediary.

When no reporting company sits in the middle, CARF has nobody to require a report from.

Chainalysis concluded that within its own dataset, CARF applied to only 14% of the transactions. The remaining 86% included activity from decentralized exchanges and peer-to-peer transfers, along with on-chain income and payments.

The study measured the framework’s effectiveness across Chainalysis’s dataset only, not across the entire crypto market. CARF targets centralized platforms, and a large portion of real crypto trading still happens on those platforms. But much of that trading never appeared on public blockchains, so it fell outside Chainalysis’s blockchain-only dataset entirely.

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What this means once reporting starts

Even transactions that fall within CARF can reach tax authorities with incomplete information. One problem involves cost basis, the original amount a person paid for an asset.

An exchange may record a sale without knowing what the customer paid for the crypto somewhere else. The customer might have bought the asset on another platform or moved it from a private wallet. Without the original purchase price, calculating the actual gain or loss becomes harder.

Most decentralized exchanges and many foreign platforms remain outside CARF’s practical reporting nexus.

Local law can still require users to declare crypto gains and income even when no platform sends an automatic report. But self-reporting rates for crypto have historically been low: a 2025 estimate from Sweden’s tax agency found that more than 90% of people who owed tax on crypto activity did not report it. A 2022 analysis by Barclays estimated the US crypto tax gap, the difference between taxes owed and taxes collected, at roughly $50 billion a year, and flagged that the true figure was likely higher given DeFi’s growth since the underlying data was collected.

Chainalysis argues that CARF’s reporting requirements alone will not close that gap. The report calls on tax authorities to analyze public blockchain data themselves, since that data stays visible even when no platform files a report.

Timeline: what happens and when

The European Union’s Directive on Administrative Cooperation, known as DAC8, took effect on January 1, 2026. DAC8 requires covered crypto providers to collect information about reportable transactions involving EU residents, and the first collection period runs through 2026.

Finland requires its first annual DAC8/CARF report by January 31, 2027. Finland will begin the first international exchange of that data in September 2027.

Estonia sets its first annual reporting deadline in June 2027.

The UK operates a CARF-aligned regime outside the EU and requires reports by May 31, 2027.

The US has committed to implement CARF, with a target date of 2029, but has not yet signed the agreement that activates actual data exchange with other countries. In the meantime, the US runs its own domestic system: Form 1099-DA already requires platforms to report digital asset sales to the IRS, independent of CARF and DAC8.

>>> Read more: CARF Crypto Framework: Switzerland and Canada Lead The Way

More countries will sign onto CARF in the coming years, but that alone won’t guarantee it captures a bigger share of crypto activity. Trading keeps moving onto decentralized exchanges and into self-custody wallets. If that trend holds, CARF’s reach could shrink five years from now, not grow.