Crypto assets are now within the reporting perimeter of CRS 2.0, but for Web3 users the more immediate rule set is the Crypto-Asset Reporting Framework, or CARF. Once a jurisdiction enacts the necessary legislation and sets up exchange relationships, crypto platforms would report annual transaction data based on a user’s tax residency.
A Caixin article published on Aug. 5, titled “Taxation of Overseas Income, Detailed Explanation of Insurance Proceeds,” raised that point while discussing the CRS 2.0 upgrade. The piece said crypto assets would enter the reporting scope. ChandlerZ of Foresight News then laid out how the OECD framework is structured and what that could mean in practice.
CRS and CARF cover different parts of the market
The Organisation for Economic Co-operation and Development, or OECD, has split the system into two tracks. Revised CRS covers central bank digital currencies, qualifying electronic money products, and crypto assets held indirectly through derivatives and investment entities. Direct trading in assets such as Bitcoin and stablecoins is handled mainly under CARF.
CARF applies to crypto assets that can be used for payment or investment. That includes cryptocurrencies, stablecoins, and derivatives issued in the form of crypto assets. Exchanges, brokers, dealers, and crypto ATM operators that facilitate fiat trades, crypto-to-crypto trades, or asset transfers for clients may fall within the definition of a reporting crypto-asset service provider. Some decentralized trading services may also be captured if there is an entity able to control or sufficiently influence how the platform operates.
What platforms would report, and what self-hosted wallets would not
Under CARF, platforms would need to collect a user’s name, address, tax residency jurisdiction, taxpayer identification number, and date of birth. They would also need to aggregate annual activity by asset, including fiat purchase amounts, proceeds from sales, fair market value for crypto-to-crypto exchanges, units of the asset, number of transactions, and inbound and outbound transfers.
If a platform can identify transfer types such as airdrops, staking income, or lending-related flows, those categories would also need to be broken out. The reported fields capture gross amounts, quantities, and transaction counts. They do not directly provide a finished calculation of a user’s taxable profit.
The reporting burden falls mainly on service providers that facilitate transactions. Individuals do not need to submit a separate wallet list to the OECD. Transfers that occur entirely between two self-hosted wallets, without the involvement of a reporting service provider, would not trigger platform reporting at the time they occur. Developers that only provide wallet software and do not execute trades for users would not take on the same obligation simply by publishing code.
That said, if a user withdraws assets from an exchange to a self-hosted wallet, the platform still has to aggregate the quantity transferred out and the fair market value. If those assets are later deposited back into a reporting platform, the incoming transfer is recorded as well. The OECD also requires service providers to keep due diligence and reporting records for at least five years. Once tax authorities receive annual aggregated data, they can carry out follow-up checks on cost basis, source of funds, and wallet ownership.
CARF looks more like an annual transaction ledger than traditional CRS
CARF uses a different data structure from traditional CRS. Standard CRS reporting usually covers year-end financial account balances, interest, dividends, and total proceeds from the sale of financial assets. CARF is closer to an annual transaction ledger organized by asset type.
Questions such as acquisition cost, losses carried across tax years, and the treatment of different categories of income remain matters for the tax law of the user’s own jurisdiction. In other words, CARF addresses whether crypto transaction information can be exchanged automatically, while tax characterization and final liability still depend on local law.
Hong Kong insurance tax cases show exchanged data is being used in enforcement
The core real-world example in the Caixin report came from offshore insurance rather than crypto. Cases have emerged in Beijing and Hangzhou, Zhejiang, involving taxation of proceeds from Hong Kong insurance policies. The cases covered policy dividends and interest generated by prepaid premiums, with a 20% tax rate applied in those examples.
Caixin said it had checked the matter with tax lawyers, commercial banks, and people in Hong Kong’s insurance industry. The report stressed that such cases are not yet widespread and that there is no publicly unified enforcement standard across regions.
Insurance products were already within the CRS perimeter. Insurance contracts with cash value must report cash value or surrender value, and financial institutions also collect the account holder’s identity, tax residency, and taxpayer identification number. The information first goes to the tax authority where the financial institution is located, then to the account holder’s tax residency jurisdiction. The receiving side determines the nature of the income, the cost basis, and the tax amount under local law.
China’s State Taxation Administration said in June that during the first five months of 2026, tax authorities had pushed related taxpayers to make about 13 billion yuan in additional tax payments through stronger outreach and compliance guidance on overseas income. The figure covers all forms of overseas income. It does not disclose how much came from each category and cannot be attributed entirely to CRS. Even so, the Hong Kong insurance cases suggest that data obtained through cross-border exchange can already feed into concrete audit and taxation leads.
Hong Kong could start in 2028, while mainland China has no published timetable
An OECD list published as of June 23, 2026 shows that 46 jurisdictions plan a first CARF information exchange in 2027, 29 plan to start in 2028, and the United States plans to start in 2029. Hong Kong appears on the 2028 list. Mainland China does not appear among jurisdictions with a published first-exchange year.
The Hong Kong government gazetted a bill covering CARF and the revised CRS on May 22 and sent it to the Legislative Council for first reading on June 3. As of Aug. 7, Hong Kong’s Inland Revenue Department still marked it as pending review by the legislature. If the bill passes, crypto-asset service providers covered by Hong Kong nexus rules would begin registration, identify users’ tax residency, and collect transaction data from Jan. 1, 2027. Hong Kong plans its first exchange in 2028.
Which jurisdictions would actually receive the data would still depend on the exchange relationships in force at that time.
For Chinese tax residents, the key question is still implementation
China’s Individual Income Tax Law says resident individuals who have a domicile in China, or who reside in China for 183 days or more in a tax year, must declare both China-source and overseas income in accordance with law. CARF deals with whether crypto trading data can be exchanged automatically. Whether a given gain is taxable, how cost basis is determined, and which income category applies would still need to be judged under China’s current tax law and any later rules.
The timing for offshore platform data tied to Chinese tax residents to enter an automatic exchange chain will depend on three things named in the report: the outcome of the Hong Kong Legislative Council’s review of the bill, the exchange partners later announced by Hong Kong’s tax authority, and whether mainland China sets out its own CARF implementation arrangement.