Stuart Adams rounds up the latest news and developments from the fast-changing world of digital assets


The Organisation for Economic Cooperation and Development’s (OECD) Common Reporting Standard (CRS) was adopted in 2014 and was designed to promote tax transparency with respect to financial accounts held abroad. Generally, it requires financial institutions to identify customers who appear to be tax resident outside the country where they hold their accounts and financial products, and annually report account information to its local tax authority. That local tax authority may then share that information with the tax authority where the customer is resident. 

Unlike traditional financial products, cryptoassets can be transferred and held without the intervention of traditional financial institutions, such as banks, and without any central administrator having full visibility on either the transactions carried out or on cryptoasset holdings. Consequently, cryptoassets are not comprehensively covered by the CRS. Further, the crypto market has given rise to a new collection of intermediaries which include exchanges, operators of crypto ATMs, crypto brokers / dealers, and wallet providers, many of which are currently unregulated. The result is that tax authorities do not have adequate visibility on taxable transactions, inhibiting their attempts to curb tax evasion.    

New cryptoasset reporting framework

On 10 October 2022, the OECD published its Crypto-Asset Reporting Framework (CARF), which was prepared on a mandate from the G20. It is a global tax transparency framework for the automatic exchange of information between countries on cryptoassets. 

Subject to carve-outs, the CARF will target any digital representation of value that relies on a cryptographically secured distribution ledger or a similar technology to validate and secure transactions. The CARF will require the automatic exchange of cryptoasset transactions with a taxpayer’s jurisdiction of residence on an annual basis and in a standardised manner like the CRS.  Relevant intermediaries would be obliged to report under the CARF.   

The next stage of the process will see the OECD taking forward its work on the legal and operational instruments (expected to involve a framework of bilateral or multilateral agreements) to facilitate the international exchange of information collected because of the CARF and to ensure its effective and widespread implementation, including the timing for starting exchanges under the CARF. 

It is imperative for intermediaries to be prepared ahead of any new obligations that they might be expected to meet. In that regard, we can help assess the impact on different groups that may be affected. 

Call for evidence on NFTs and the blockchain 

On 4 November 2022, the Digital, Culture, Media and Sport Committee launched an inquiry into the operation, risks, and benefits of non-fungible tokens (NFTs) and blockchain technology. MPs are expected to consider whether NFT investors, especially vulnerable speculators, are put at risk by the market. The inquiry may also investigate the wider benefits that NFTs and blockchain technology could provide the UK economy.   

The inquiry is likely to examine whether more regulation is needed, ahead of a Treasury review.  

The committee published a call for evidence to the inquiry, and asked for written submissions by 6 January 2023 on the following questions: 

  • Is the UK’s light-touch NFT regulation sufficient? 
  • What are the potential harms to vulnerable people of NFT speculation? 
  • Do blockchains offer security to British investors? 
  • What are the potential benefits to individuals and society of NFT speculation? 

Law Commission review on governing law and jurisdiction in respect of digital assets 

On 18 October 2022, the Law Commission of England and Wales announced the launch of a review, sponsored by the Ministry of Justice, on how the rules of private international law on governing law and jurisdiction apply to digital assets and other emerging technology. At the time of writing, the review, Digital Assets: which law, which court?, is at the pre-consultation stage. 

The commission points to the rise of new technologies, which often rely on a distributed technology such as blockchain technology, which has generated several conflict-of-laws issues, leading to legal uncertainty for users, organisations, and governments. For example, which courts have power or jurisdiction to hear a dispute concerning digital assets? This question arises because digital assets are intangible and often distributed, so determining their location or ‘situs’ can be difficult to pinpoint. The commission has identified conflict-of-laws issues in its earlier work on digital assets and electronic trade documents work. This new review will build upon that work and seeks to provide clarity in areas of current uncertainty. 

The Law Commission will aim to develop reform proposals in a public consultation paper, which is due to be published in the second half of 2023.