The UK tax authority has intensified its scrutiny of cryptocurrency investors, doubling the number of warning letters sent to those suspected of underreporting or evading taxes on digital asset gains.
HM Revenue & Customs (HMRC) issued nearly 65,000 letters in the 2024–25 tax year, up from 27,700 the previous year, according to data obtained by the Financial Times under the Freedom of Information Act.
These “nudge letters” are intended to encourage investors to voluntarily correct their tax filings before formal investigations are initiated.
The sharp rise highlights HMRC’s increasing focus on crypto tax compliance. Over the past four years, the agency has sent more than 100,000 such letters, with activity accelerating alongside growing crypto adoption and rising asset prices.
7 Million UK Adults Now Own Crypto
The Financial Conduct Authority estimates that seven million adults in the UK currently hold cryptocurrency, up from roughly 10% (5 million) in 2022 and 4.4% (2.2 million) in 2021, highlighting growing interest in digital assets.
“The tax rules surrounding crypto are quite complex, and there’s now a volume of people trading crypto without realizing that even moving from one coin to another can trigger capital gains tax,” said Neela Chauhan, a partner at UHY Hacker Young, which submitted the FOI request to HMRC, speaking to the Financial Times.
HMRC’s visibility into the crypto market has improved significantly. The agency now receives transaction data directly from major exchanges and will gain automatic access to global exchange data from 2026 under the Organisation for Economic Co-operation and Development (OECD)’s Crypto-Assets Reporting Framework (CARF).
US Lawmakers Consider Crypto Tax Exemptions
In the United States, senators are exploring updates to crypto tax policy, including exemptions for small transactions and clarification on staking rewards.
During a Senate Finance Committee hearing earlier this month, lawmakers debated whether everyday crypto payments should trigger capital gains tax and how to properly classify income from staking. Coinbase’s vice president of tax, Lawrence Zlatkin, recommended a de minimis exemption for crypto transactions under $300.
Global Crackdowns Continue
Meanwhile, South Korea’s National Tax Service (NTS) has intensified its enforcement on crypto tax evasion, warning that assets stored in cold wallets could be seized if linked to unpaid taxes.
