During the plenary session of the European Parliament on 13 September 2023, parliamentarians adopted the eighth iteration of the Directive on Administrative Cooperation, more commonly known as DAC8 (Directive on Administrative Cooperation), by a large majority – 535 votes in favour, 57 against and 60 abstentions.
According to publicly available documentation, DAC8 focuses in particular on ensuring that Member States' tax authorities have appropriate legal tools to track and assess all cryptocurrency-based transactions made by businesses, all types of organizations, but also individuals, throughout the Union.
Each of the 27 EU countries will have until 31 December 2025 to implement the directive, which will be fully applicable from 1 January 2026.
In its current form, DAC8 refers in particular to the Crypto Asset Reporting Framework (CAFR) and Markets in Crypto Assets (MiCA), which will ultimately cover all crypto asset transactions related to the European Union.
The goal of the newly adopted legislation is to actively combat tax evasion and money laundering. Therefore, thoroughly verifying all transactions will inevitably entail a significant loss of privacy. Anonymity has always been one of the keywords of the cryptocurrency market. While decentralized protocols (DeFi) and direct exchanges between users will still be able to function outside the gaze of big brother, wherever a service provider appears, it will be obligated to automate transaction reporting. The use of so-called "mixers" is to be drastically limited.
This alert is for informational purposes only and does not constitute legal advice.
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