UK HM Revenue and Customs (HMRC) is seeking to expand its investigative authority over crypto assets, proposing rules that would allow tax authorities to directly obtain customer data from service providers and update inspection protocols for software and electronic records. The initiative aims to strengthen tax enforcement capabilities within the digital asset sector. Crypto tax firm Recap has warned that the proposed definition of "service provider" is overly broad and could encompass non-custodial wallet software, blockchain explorers, hardware wallet manufacturers, and tax software providers. Industry observers note that linking personal identities to transparent on-chain records could expose long-term asset activity, potentially increasing risks of data breaches, extortion, and physical attacks against investors.