Tax Gap in Cryptocurrency Market Soars to $457 Billion Worldwide

Chainalysis estimates that potentially taxable crypto activity on major public blockchains reached at least $457 billion worldwide in 2025. This staggering figure represents a massive amount of unreported tax activity, with the United States accounting for an estimated $112.6 billion and North America leading all regions with $134.6 billion.

The European Union follows closely with $125.1 billion, highlighting the significant scope of this issue. However, the report argues that current international tax reporting rules will likely capture only a minority of this activity, leaving most onchain activity outside the data flows tax authorities can use.

CARF, or the Crypto-Asset Reporting Framework, was developed by the OECD to address these gaps. It requires covered providers to collect customer transaction and tax residency information and share it with tax authorities for cross-border exchange. However, Chainalysis estimates that CARF-covered transactions account for only 14% of taxable onchain activity.

This disparity is due in part to CARF's focus on intermediaries and reporting obligations tied to centralized service providers. Decentralized finance (DeFi) activity may remain largely uncovered as a result, with much DeFi activity involving no centralized operator or custodial relationship that triggers reporting obligations.