Starting January 1, 2026, the UK government will begin enforcing stricter rules on crypto users and service providers. Anyone using digital asset platforms without submitting complete identity information could face penalties. Authorities say total fines could reach $407 (£300).
KYC Enforcement
To combat tax evasion and financial crimes, crypto users in the UK will be required to provide key personal information, including a full legal name, date of birth, home address, and National Insurance number or tax identification number, before accessing the services.
Without these details, users won’t be able to deposit, trade, or withdraw funds on UK-based crypto platforms. The new rule is part of the UK’s framework, which aims to track crypto-related income and ensure proper tax reporting. Also, crypto companies will be responsible for collecting and reporting this data to HM Revenue & Customs (HMRC).
The policy ensures that the government can maintain better records of cryptocurrency activity and prevent individuals from hiding behind anonymous accounts.
Heavy Fines for Ignoring the Rules
The government has warned that companies that fail to follow the new KYC rules could be fined $407 per user. If enough users or platforms fail to meet the requirements, the combined penalties could exceed $543.9 million. Officials say this isn’t a new tax, but rather a means to ensure that cryptocurrency profits are reported accurately. In the UK, capital gains exceeding $4,079 are taxable, and many users haven’t been reporting these earnings.
These new measures send a clear message that crypto must follow the same rules as traditional finance. The government urges both users and platforms to take immediate action by updating their personal details and verification processes before the 2026 deadline to avoid fines or service disruptions.
Meanwhile, global regulators are also stepping up enforcement efforts. In Turkey, authorities have shut down 46 crypto websites for offering services without proper licenses. These platforms failed to meet key requirements such as user identity checks and financial transparency.
Additionally, their law now requires crypto platforms to verify users’ identities, particularly for large transactions, and operate in full compliance. Operators of unauthorized services may face prison sentences, reflecting the country’s stricter stance on crypto regulation.
