PayPal Freezes Crypto Purchases in Luxembourg Amid CARF Implementation

PayPal has paused crypto purchases and new account onboarding in Luxembourg due to regulatory updates. The pause began on June 25, 2026, as the country implements the Crypto-Asset Reporting Framework (CARF), an international tax-transparency system developed by the Organisation for Economic Co-operation and Development.

The CARF framework applies to new and existing crypto accounts, requiring covered providers to submit user information and transaction data to the Luxembourg Inland Revenue. PayPal will collect and review customer details to determine which accounts are reportable under CARF, including a customer's name, address, tax identification number, and aggregated data on crypto acquisitions, dispositions, and transfers.

The first reportable data covers calendar years beginning January 1, 2026, with reports due by June 30 of the following year. Failure to comply with due-diligence and reporting obligations can result in fines of up to €250,000, while certain registration and filing violations carry a €5,000 fine.

PayPal expects crypto purchases to resume by the end of 2026 but has not provided a specific restoration date. The pause is limited to Luxembourg and does not indicate a broader suspension across Europe.