When Is Crypto Reported Under CARF?

In this episode, we break down when crypto transactions become reportable under the Crypto-Asset Reporting Framework (CARF) — and why not every wallet movement or exchange triggers a filing.

Key Takeaways:

• 
  
• 
  
• Spending Crypto Triggers Reporting:
• 
  
• Direct purchases of goods or services with crypto remain rare. Most users must convert crypto into fiat before spending — and that’s often where reporting begins.
• 
  
• 
  
• 
  
• Acquiring Crypto Assets:
• 
  
• 
  

1. 
   
2. 
   
3. With fiat currency: Report the total amount paid.
4. 
   
5. 
   
6. 
   
7. By exchanging crypto: Report the fair market value (FMV) of what was acquired.
8. 
   
9. 
   

• 
  
• 
  
• 
  
• Disposing of Crypto Assets:
• 
  
• 
  

1. 
   
2. 
   
3. Selling for fiat: Report the gross amount received.
4. 
   
5. 
   
6. 
   
7. Swapping crypto-to-crypto: Report the FMV of the asset disposed.
8. 
   
9. 
   

• 
  
• 
  
• 
  
• Retail Payment Transactions:
• 
  
• RCASPs must report retail crypto payments above $50,000, based on the FMV of goods or services purchased.
• 
  
• 
  
• 
  
• Transfers to Wallets:
• 
  
• 
  
• 
  
• 
  
• Transfers to wallets outside the RCASP (like self-hosted wallets) must be reported if the wallet’s ownership isn’t known.
• 
  
• 
  
• 
  
• In such cases, the wallet address itself is omitted from the report but retained for regulators.
• 
  
• 
  
• 
  
• 
  
• 
  
• Transaction Categories:
• 
  
• 
  
• 
  
• 
  
• Exchange Transactions: Crypto-to-fiat or crypto-to-crypto swaps (e.g., BTC to USD, ETH to stablecoin).
• 
  
• 
  
• 
  
• Transfers: Crypto moving between wallets or accounts under different control.
• 
  
• 
  
• 
  
• Reportable Retail Payments: Crypto used directly for large purchases.
• 
  
• 
  
• 
  
• 
  
• 
  
• Multiple Asset Reporting:
• 
  
• Each crypto type — or even NFT variation — may require its own report for the same user if traded or held separately.
• 
  
• 
  

Why It Matters:

CARF’s detailed reporting structure ensures that both exchanges and users are fully visible to tax authorities once crypto moves — turning what was once “off-chain secrecy” into on-chain transparency.