The taxman is racing to catch up with crypto’s explosive growth which had 741 million users worldwide just last year. Global crypto reporting has arrived, yet U.S. technology and enforcement capacity continue to lag. Recent reporting by the International Consortium of Investigative Journalists (ICIJ), gives sobering information about the decrease in the number of federal investigators assigned to review anti–money laundering practices in the cryptocurrency industry.
This article examines whether the Organization for Economic Co-operation and Development’s (OECD) Crypto-Asset Reporting Framework (CARF) can truly deliver on its promise of transparency, or if the U.S. risks repeating the Foreign Account Tax Compliance Act (FATCA)’s pitfalls of data overload without meaningful follow-through.
Expanding Crypto Transparency, But Contracting IRS Enforcement Capacity
In a recent Forbes article, I discussed the United States’ movement toward alignment with the Crypto-Asset Reporting Framework developed by the OECD. CARF represents the next major step in global tax transparency for digital assets, expanding automatic exchange of information into the cryptocurrency sphere much as prior frameworks did for offshore financial accounts.
According to ICIJ, the number of federal investigators assigned to review anti–money laundering safeguards in the cryptocurrency sector declined last year to its lowest level since at least 2017. According to the ICIJ report, the number of IRS investigators assigned in 2025 to examine anti–money laundering safeguards at cryptocurrency firms and other money transmitters declined by approximately 33 percent, falling to 139 agents from 208 the prior year. The figures reflect personnel assigned to review compliance practices at so-called nonbank financial institutions, including crypto exchanges and other money services businesses, rather than necessarily indicating IRS layoffs.
The data was obtained by ICIJ through a public records request showing that the 2025 staffing level was the lowest in almost a decade. This staffing decline comes at a curiously terrible time. Crypto growth is exploding and we are seeing high-profile enforcement actions, such as the 2025 sentencing of Samourai Wallet founders for facilitating money laundering involving Bitcoin.
I have written previously about the case of Roger Ver (known as “Bitcoin Jesus”). The Ver case illustrates how offshore crypto holdings can rapidly escalate from reporting oversights to serious criminal exposure. Ver, who renounced U.S. citizenship in 2014 while holding substantial Bitcoin, ultimately entered a deferred prosecution agreement in late 2025, paying nearly $50 million in back taxes, penalties, and interest to resolve charges of tax evasion and related offenses. Once CARF data begins flowing automatically across borders, reporting mismatches will be flagged routinely, turning potential oversights into costly, and potentially prosecutable, problems for taxpayers.
CARF And The Expansion Of Global Reporting
CARF is designed to create standardized reporting obligations for crypto-asset service providers around the globe. It will enable automatic exchange of information across participating countries. CARF reflects a recognition that digital assets are inherently cross-border and that unilateral enforcement on a country-by-country basis cannot effectively address global tax compliance risks.
Almost 50 jurisdictions including major EU countries, the United Kingdom, Japan, and Singapore have implemented rules aligning with CARF, effective January 1, 2026. The first international data exchanges are scheduled to take place in 2027. The U.S. has signaled its intent to implement CARF legislation by 2029. Treasury proposals are already moving forward to ensure domestic reporting is aligned.
If implemented robustly, CARF would do for crypto assets what FATCA did for offshore financial accounts. It would require intermediaries, such as crypto exchanges, in each jurisdiction that is a CARF-signatory to collect, verify and transmit taxpayer-identifying information and transaction data to the relevant tax authorities in those countries. That information would then be automatically exchanged among the CARF participating jurisdictions.
In theory, such automatic exchange of information about crypto holdings and transactions significantly reduces the ability of taxpayers to obscure offshore crypto assets or income. Collecting data and reporting it, however, are only the first steps. Transparency regimes are information systems; they generate data, and in very huge quantities. What they do not automatically generate is enforcement.
The FATCA Experience As Precedent
The experience under FATCA offers an instructive comparison.
FATCA was enacted in 2010 and transformed international tax compliance. Although enacted 16 years ago, it has been a very rocky road to enforce this law. This is unsurprising, given FATCA’s mandate to, among other things, have foreign financial institutions (or the foreign governments in the relevant country) send detailed financial information about certain U.S. person account holders directly to the IRS. The volume of inbound data to the IRS increased dramatically. Compliance burdens on institutions were substantial. Global financial transparency shifted.
Yet FATCA also revealed an operational reality. Prior oversight reports by the Treasury Inspector General for Tax Administration have found that, despite significant implementation costs, the IRS struggled to fully utilize FATCA data due to missing taxpayer identification numbers, system limitations and incomplete compliance planning. Even after more than a decade of implementation, recent IRS FATCA data suggests that a significant share of foreign account information cannot be reliably matched to specific U.S. taxpayers, limiting the practical use of the data for enforcement purposes. Outdated IT systems, integration of new reporting streams and resource constraints in examination functions are largely to blame. Moreover, the IRS has continued to extend temporary relief for reporting of U.S. taxpayer identification numbers by foreign financial institutions, reflecting persistent challenges in obtaining and processing complete FATCA information.
The lesson learned from FATCA is that large-scale reporting systems require matching technological infrastructure, analytics capability and personnel resources to be effective. Data without analytics and analytics without enforcement capacity are not achieving the tax enforcement goals.
CARF will generate data that is arguably more complex than FATCA’s. Crypto transactions involve wallets rather than traditional accounts. Transfers may occur across multiple exchanges, decentralized platforms or self-custody arrangements. Asset valuation is volatile. Attribution questions are technically intricate. As a result, CARF reporting will likely be very high-volume, technically dense and analytically highly demanding. If FATCA’s data deluge overwhelmed the IRS despite a more straightforward asset class, what will happen when CARF floods the system with volatile crypto valuations, pseudonymous wallets, and DeFi transactions?
What Next? Expanding Data But Lowering Enforcement Capacity
If the United States participates in a global reporting regime, its domestic enforcement architecture must be capable of meaningfully using the data it receives. Reporting reciprocity without credible follow-through may weaken the system’s overall effectiveness. The FATCA experience suggests that reporting expansion can seriously outpace operational capacity. If CARF generates vast new data inflows but lacks the analytic infrastructure and examination resources, enforcement may become highly selective and weakened.
The next phase of U.S. crypto oversight will not prove to be effective if it involves only a vastly expanded reporting network. Enforcement resources and analytic capability must evolve in parallel. If there is a lack of committed investment in IRS technology, staffing, and specialized crypto expertise, CARF risks becoming another ambitious framework that only generates mountains of data without the bite of enforcement.
Posted March 26, 2026
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First published on Forbes March 10, 2026
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