Chainalysis projects that potentially taxable on-chain crypto activity worldwide will reach a minimum of $457 billion in 2025. The analytics firm’s estimates are drawn from realized capital gains, crypto mining revenue, staking and lending yields, as well as various payments across six major blockchains. That substantial figure does not even account for trading turnover across centralized crypto exchanges.
New Rules, Old Targets
To capture state revenue from the crypto sector, the Organisation for Economic Co-operation and Development (OECD) developed an international tax reporting framework known as the Crypto-Asset Reporting Framework (CARF). This cross-border data collection system is set to take effect on January 1, 2026. A total of 48 jurisdictions, including the UK and European Union member states, have agreed to implement the cross-border information exchange system.
The Chainalysis report highlights a significant design flaw in the tax rules. The CARF framework is only capable of capturing 14% of the hundreds of billions of dollars in total calculated on-chain activity.
The remaining 86% is expected to escape the OECD’s automated reporting system entirely. This vast overlooked share covers all transaction volume on decentralized exchanges (DEXs), peer-to-peer (P2P) fund transfers, direct on-chain revenue generation, and everyday crypto payments.
The structural reporting flaw stems from its foundational premise. CARF is designed around third parties acting as transaction intermediaries, requiring centralized crypto entities to submit their customers’ financial records. When transaction volume moves entirely into disintermediated DeFi and P2P ecosystems, the tax framework is cut off from the information flow.
DeFi Oversight in the Works
International regulators are well aware of the limitations of their framework. Colby Mangels, a former OECD advisor who helped draft the CARF document, noted that policymakers are paying close attention to the decentralized ecosystem. According to Mangels, authorities are closely monitoring the evaluation of Anti-Money Laundering (AML) standards for DeFi projects, and significantly more binding rules for DEX platforms are currently under review.
Concurrently with the release of this research, Chainalysis is also embroiled in legal proceedings in the United States. The blockchain intelligence firm filed a separate lawsuit against the government over a decision by Immigration and Customs Enforcement (ICE), protesting the award of a $95 million surveillance contract to key competitor TRM Labs.
The rollout of global reporting rules in 2026 will leave little room for centralized exchange users to hide their asset portfolios. However, for decentralized transaction participants, the regulatory loophole remains wide open.
Reported via Cointelegraph.
Also read: What Is DeFi (Decentralized Finance)?
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
