CARF Quick Guide

Summary

This is a DITC 'Quick Guide' explaining the new Crypto-Asset Reporting Framework (CARF) as implemented in the Cayman Islands via the Tax Information Authority (International Tax Compliance) (Crypto-Asset Reporting Framework) Regulations, 2025. CARF is a new OECD tax-transparency standard, complementary to the existing Common Reporting Standard (CRS), aimed at capturing information on crypto-asset transactions to prevent tax evasion. The Regulations take effect on 1 January 2026, with the first reporting and exchange of information occurring in 2027 for the 2026 calendar year.

Scope and Obligations

• Who is covered: CARF applies to 'Cayman Reporting Crypto-Asset Service Providers' (RCASPs) — entities or individuals that, as a business, effectuate exchange transactions in Relevant Crypto-Assets for customers, including exchanges, brokers, dealers, and operators of crypto ATMs, whether resident in the Cayman Islands or operating as a branch there.
• Due diligence: RCASPs must apply due diligence procedures, building on CRS and AML/KYC processes, to identify Crypto-Asset Users, Reportable Persons, and Relevant Transactions.
• Reporting: RCASPs must report identification and aggregated transaction information annually to the DITC.

Implementation and Enforcement

• Timeline: The document sets out an implementation timeline covering due diligence commencement, registration deadlines for both pre-existing and new RCASPs, self-certification collection deadlines, the first reporting deadline, and a requirement to notify DITC of changes in circumstances.
• Enforcement powers: The CARF Regulations (Part 4) contain enforcement powers allowing the Authority to impose penalties for reporting failures without first issuing a breach notice.
• Comparison to CRS: The guide compares CARF's scope and mechanics to the existing CRS regime.

As a guidance document, it is explanatory and points readers to the underlying Regulations and OECD materials for full legal detail.

Key obligations

• RCASPs must apply due diligence procedures from 1 January 2026 to identify Crypto-Asset Users, Reportable Users, Reportable Persons and Relevant Transactions.
• Pre-existing RCASPs must register required information (including a Cayman-based Principal Point of Contact) with the DITC by 30 April 2026.
• New RCASPs must register required information with the DITC by 31 January of the following year after commencing relevant activity.
• RCASPs must collect valid self-certifications for new Individual and Entity Crypto-Asset Users upon establishing the relationship.
• RCASPs must collect valid self-certifications for pre-existing Individual and Entity Crypto-Asset Users within 12 months of 1 January 2026 (i.e. by 31 December 2026).
• RCASPs must submit CARF returns, nil returns, Partner Jurisdiction returns and declarations, and any other information requested by the Authority, with first reporting due 30 June 2027 for the 2026 calendar year.
• RCASPs must file a change notice with the DITC within 30 calendar days of any change in circumstances.
• RCASPs must familiarise themselves with jurisdictional nexus rules to avoid duplicate reporting.

Applies to

Reporting Crypto-Asset Service Providers (RCASPs), Crypto-Asset exchanges, brokers and dealers in Relevant Crypto-Assets, operators of Relevant Crypto-Asset ATMs

Deadlines

• 1 January 2026: CARF Regulations come into force; RCASPs must begin applying due diligence procedures to identify Crypto-Asset Users, Reportable Users, Reportable Persons and Relevant Transactions.
• 30 April 2026: Registration deadline for pre-existing RCASPs to register required information (including Cayman-based PPoC) with the DITC.
• 31 January of the following year: Registration deadline for new RCASPs to register required information with the DITC.
• Upon establishing relationship: RCASPs must collect valid self-certification for new Individual and Entity Crypto-Asset Users.
• Within 12 months of 1 January 2026 (i.e. 31 December 2026): RCASPs must collect valid self-certifications for pre-existing Individual and Entity Crypto-Asset Users.
• 30 June 2027: First reporting under CARF for the 2026 calendar year - submission of returns, nil returns, Partner Jurisdiction returns and declarations.
• Within 30 calendar days: RCASPs must file a change notice with the DITC notifying any change in circumstances.