Crypto Market's Taxable Activity Falls Outside Regulators' Reach

The cryptocurrency market's rapid growth and increasing complexity are leaving a significant portion of taxable activity outside the reach of regulators, according to a report by Chainalysis. The blockchain analytics firm estimates that at least $457 billion in potentially taxable crypto activity occurred on-chain globally in 2025.

This figure covers realised gains, income from mining, staking, lending, and gambling, as well as crypto-denominated payments across Bitcoin, Ethereum, Solana, Tron, BNB Smart Chain, and Base. However, only about 14% of this activity falls within the practical reach of the OECD's Crypto-Asset Reporting Framework (CARF).

This leaves approximately 86% of taxable activity outside CARF's reporting framework, including transactions involving decentralised exchanges, peer-to-peer transfers, private wallets, on-chain income, and crypto payments. The problem arises from CARF's reliance on identifiable intermediaries to collect tax information, a model that no longer aligns with the evolving cryptocurrency market.

The solution may not be simply expanding CARF or requiring every wallet or blockchain address to identify its owner. Instead, combining CARF with blockchain intelligence and targeted enforcement could provide a more effective approach to regulating taxable crypto activity.