UK tax authority seeks broader powers to obtain crypto customer data from service providers

The UK’s tax authority is pushing to widen its powers to investigate crypto assets, with a proposal that would let it obtain customer information directly from crypto asset service providers and revise rules covering inspections of software and electronic records. The move was flagged by Odaily, which said the proposal could materially expand the scope of data requests tied to crypto-related activity. UK crypto tax software firm Recap warned that the draft rules define service providers too broadly. In its view, the wording could extend beyond custodial businesses and capture non-custodial wallet software, blockchain explorers, hardware wallet makers, and tax software providers. Recap also pointed to privacy and safety concerns. Because Bitcoin transaction records are publicly visible, linking an investor’s name, address, and tax identity to an on-chain wallet address could expose a long-term record of asset activity. The company said that kind of linkage may raise the risk of data leaks, extortion, and physical attacks.