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Phemex Crypto Market Daily: Crypto Market Drops: BTC and ETH Slide as Regulatory Uncertainty Rises (Feb 01)

OECD Implements Crypto Asset Reporting Framework to Enhance Global Tax Compliance

The OECD has advanced the implementation of its Crypto Asset Reporting Framework (CARF), marking a significant step towards global crypto tax compliance. This initiative aims to standardize the reporting of crypto asset information across multiple jurisdictions, requiring trading platforms, brokers, and other institutions to provide detailed account and transaction data to tax authorities. The framework integrates fiat currency transactions, on-chain analytics, and internal ledger data to enhance regulators' ability to track undeclared assets. With over 70 countries committed to CARF, the collection of relevant transaction data is set to begin in 2026, leading to the first round of cross-border tax information exchange in 2027. As global crypto tax regulations tighten, holders of large undeclared offshore crypto assets face increased compliance risks, prompting some investors to seek voluntary disclosure to mitigate potential legal consequences. Analysts predict that crypto asset tax compliance requirements will continue to intensify as the framework is fully implemented.

U.S. Government Shutdown Freezes SEC Crypto Operations, Bitcoin Drops 7%

The U.S. government shutdown that began on January 31 has forced the Securities and Exchange Commission (SEC) to significantly reduce its operations, impacting the cryptocurrency sector. With Congress failing to finalize funding bills, the SEC is operating with limited staff, halting reviews for crypto exemptions and stalling innovation. Key divisions such as Corporation Finance and Trading and Markets have suspended non-essential work, leaving crypto projects in limbo. The shutdown has triggered a sharp market reaction, with Bitcoin falling nearly 7% to around $78,000 and Ethereum dipping below $3,000. Liquidations across exchanges have exceeded $1 billion, exacerbated by ETF outflows and regulatory uncertainty. The delay in SEC operations has frozen at least 16 spot ETF applications and paused broader guidance on digital assets, adding to the sector's volatility. Analysts remain cautiously optimistic, anticipating a quick resolution if partisan divides are bridged.