UK Tightens Crypto Control: Businesses Must Collect Detailed Personal Data from 2026
The UK government has just announced a new step to increase transparency and oversight in the cryptocurrency sector. From January 1, 2026, cryptocurrency companies operating in the country will be required to collect, store and report detailed personal information of all customers – a move that is considered both necessary and potentially risky in terms of security.
The new regulations issued by HM Revenue and Customs (HMRC) require cryptocurrency platforms to record the full name, home address, date of birth and tax identification number of individual users. For organizations and businesses, information such as company name, address and legal registration number must also be collected. Even transactions between personal wallets are not exempt.
Notably, the UK government has not only required reporting for cross-border transactions – as part of the international CARF (Crypto-Asset Reporting Framework) – but has also extended the requirement to all domestic transactions. Companies that fail to comply will face fines of up to £300 (around $400) for each user who fails to report properly.
Transparency or data security concerns?
According to officials, the goal of the regulation is to protect consumers, prevent money laundering and tax evasion, and bring the cryptocurrency sector closer to the traditional financial system. However, it has also raised growing concerns about privacy and personal data security – especially in the context of the recent disclosure of user data by one of the world's largest cryptocurrency exchanges.
Coinbase Data Breach: Alarm Bell
Shortly after the UK announced new regulations, Coinbase – one of the world’s leading cryptocurrency exchanges – confirmed that it had suffered a data breach due to fraudulent activity by an outside contractor. Attackers bribed employees to access sensitive information, including names, emails, phone numbers, addresses, Social Security numbers, and even copies of passports and driving licenses.
Although Coinbase said the breach affected less than 1% of its users (tens of thousands), the incident raised questions about the ability of exchanges to protect data, especially when dealing with the large volumes of information required by the new regulations.
Industry Speaks Out
Mark Aruliah, EMEA Policy Director at Elliptic, a blockchain analytics firm, called the regulation “a welcome next step,” noting that it would bring the crypto industry closer to traditional financial standards.
“While it may put pressure on smaller startups, it will promote transparency and build trust with consumers,” Aruliah said.
However, he cautioned: “It’s not just about collecting data – it’s about protecting it. Failure to do so could result in not just fines but also unfathomable reputational damage.”
A Warning to Crypto Businesses
The new UK regulation not only reflects a global trend – with countries stepping up oversight of digital currencies – but also serves as a wake-up call for companies operating in the space. Collecting data is one thing, but protecting it from cyberattacks and insider risks is a much bigger challenge.
Without early preparation, companies could face both financial losses and a loss of user trust – an invaluable asset in the digital age.
In short, the UK’s new move shows that the future of the cryptocurrency industry cannot be without strict supervision, but at the same time, it also poses an urgent need for enhanced security, transparency and accountability – prerequisites for cryptocurrencies to become part of a sustainable global financial ecosystem.
