February 24, 2026 – A CARF reporting solution is essential for crypto exchanges, brokers, and custodians preparing for the OECD Crypto-Asset Reporting Framework (CARF). Label and Sovos have partnered to deliver an end-to-end CARF reporting solution that enables digital asset platforms to meet global tax transparency requirements with zero-rejection accuracy. Learn more about Label’s dedicated CARF reporting platform.
What is the OECD Crypto-Asset Reporting Framework (CARF)?
The OECD Crypto-Asset Reporting Framework (CARF) introduces a global standard for tax transparency across digital asset transactions. Beginning in 2027 (for the 2026 tax year), financial institutions and digital asset platforms will be required to collect, validate, and report detailed client and transaction data across multiple jurisdictions.
CARF applies to crypto exchanges, brokers, custodians, and Virtual Asset Service Providers (VASPs), covering transaction types such as crypto-to-fiat conversions, crypto-to-crypto transfers, staking rewards, and retail payments, all subject to strict due diligence and reporting requirements.
Challenges of CARF Compliance for Digital Asset Platforms
Digital asset platforms face significant operational and technical challenges in meeting CARF requirements:
- Aggregating transaction data across multiple crypto asset types and systems
- Collecting and validating tax self-certifications at onboarding
- Applying foreign exchange rules for fiat valuation
- Generating OECD-compliant CARF XML files with zero tolerance for formatting errors
- Integrating CARF alongside existing FATCA and CRS reporting frameworks
Building and maintaining these capabilities in-house requires deep regulatory expertise, scalable data infrastructure, and ongoing adaptation to evolving global requirements.
CARF Reporting Solution: Label and Sovos Partnership
Label, a provider of automated FATCA, CRS, and CARF compliance solutions, has partnered with Sovos to deliver a comprehensive CARF reporting solution for digital asset platforms.
The combined offering integrates Label’s purpose-built CARF technology with Sovos’ global tax reporting infrastructure, including 1099-DA and broader information reporting capabilities. This enables financial institutions to manage digital asset and traditional tax reporting obligations within a single, unified ecosystem.
“CARF introduces a new level of complexity for digital asset platforms, requiring robust data aggregation, validation, and reporting capabilities,” said Scott Nice, Chief Revenue Officer at Label. “Our partnership with Sovos delivers a scalable solution that removes the burden of building CARF compliance capabilities in-house.”
“Sovos is committed to helping organizations stay ahead of evolving regulatory requirements,” said Wendy Walker, VP of Regulatory Affairs at Sovos. “By partnering with Label, we extend our digital asset reporting capabilities to include CARF within a broader, integrated compliance framework.”
Key Features of the CARF Compliance Solution
The joint solution automates the full CARF compliance lifecycle:
- Automated onboarding and tax self-certification collection with real-time validation
- Transaction aggregation across all crypto asset categories
- Fiat valuation applying relevant foreign exchange rules
- OECD CARF XML generation with proven zero-rejection accuracy
- Integration with FATCA and CRS workflows, enabling unified global reporting
Additional capabilities include:
- Unified reporting across digital assets and traditional investments
- Automated cost basis tracking and gain/loss calculations
- Comprehensive tax ID compliance, including W-8/W-9 collection and TIN matching
- Seamless integration with 1099-DA, 1099-B, and other reporting obligations
- State-level reporting readiness aligned with the Combined Federal/State Filing Program
- Consolidated tax statements to improve the end-client experience
Who Needs a CARF Reporting Solution?
This CARF reporting solution is designed for:
- Crypto exchanges
- Digital asset brokers
- Custodians
- Virtual Asset Service Providers (VASPs)
- Banks and fintechs offering digital asset services
- Fund managers and financial institutions with crypto exposure
Organizations subject to CARF must ensure accurate, scalable, and audit-ready reporting processes across jurisdiction, making automation essential.
Why a Unified CARF, FATCA, and CRS Approach Matters
CARF does not exist in isolation. Financial institutions must manage multiple global tax reporting regimes simultaneously, including FATCA and CRS.
By integrating CARF into existing compliance workflows, organizations can:
- Eliminate data silos across regulatory frameworks
- Reduce operational complexity and duplication
- Improve data quality and exception handling
- Ensure consistency across multi-jurisdiction reporting obligations
This unified approach enables firms to scale compliance operations efficiently as regulatory requirements continue to evolve.
Explore the full capabilities of our CARF reporting platform.
About Label
Label is a leading provider of automated end-to-end compliance software and expert tax services, specializing in FATCA, CRS, and CARF due diligence and reporting solutions. Combining regulatory expertise from top financial institutions with advanced engineering talent, Label delivers innovative, automated solutions tailored to the financial sector. The company serves banks, fintechs, fund managers, and service providers globally, delivering multi-jurisdiction reporting with a sustained zero-percent XML rejection rate.
About Sovos
Sovos is transforming tax compliance from a business requirement into a force for growth. Its Compliance Cloud platform enables organizations to identify, determine, and report on tax obligations globally, processing more than 16 billion transactions annually across nearly 200 countries. More than 100,000 customers—including half the Fortune 500—rely on Sovos for tax and regulatory compliance.
