Crypto-Asset Reporting Framework (CARF)
It is a new global tax transparency framework to provide for reporting and exchange of information with respect to crypto assets released by OECD.
Operations of CARF
- Enable automatic exchange of crypto-asset transaction data with jurisdiction of residence of taxpayers on an annual basis, in a standardised manner like CRS.
- Target any digital representation of value that relies on a cryptographically secure distributed ledger or a similar technology to validate and secure transactions.
- Entities or individuals that provide services effectuating exchange transactions in crypto assets for, or on behalf of customers would be obliged to report under the CARF.
MICA
Recently, European Parliament has formulated a new law "Markets in Crypto-Assets (MiCA)" to regulate cryptocurrencies. According to experts, it could become a trendsetter for crypto regulation globally.
Salient Features of MICA
- Applicability: Issuers of Crypto assets, crypto exchanges and service providers that are currently not regulated.
- Scope: Covers almost all forms of crypto assets such as private crypto currencies, stable coins etc. However, as of now, Non-Fungible Tokens (NFTs) are not covered.
- Legal Framework for Crypto assets: All entities issuing crypto assets would be required to get licence and comply with certain prudential rules. For assets with no issuer, such as Bitcoin, exchanges will be required to offer a white paper about potential risks, with possibility of being liable for misleading contents.
- Regulation: European Securities and Markets Authority (ESMA) and European Banking Authority (EBA) would oversee monitoring crypto markets.
- Countering Money laundering in line with the EU Anti-Money-Laundering (AML) framework.