The UK tax authority has stepped up its scrutiny of crypto investors, doubling the number of warning letters sent to those suspected of evading or evading taxes on digital asset gains.
HM Revenue and Customs (HMRC) issued around 65,000 letters in the 2024-25 tax year, the Financial Times reported on Friday, citing data obtained under the Freedom of Information Act.
The letters, known as “nudge letters,” are designed to compel investors to voluntarily correct their tax filings before a formal investigation begins.
The sharp rise reflects HMRC’s increased focus on crypto-related tax compliance. Over the past four years, the agency has sent more than 100,000 such letters, with activity accelerating as crypto adoption and asset prices rise.
Related: How to File Crypto Taxes in 2025 (US, UK, Germany Guide)
7 million UK adults own crypto
The Financial Conduct Authority estimates that seven million UK adults now own crypto, compared to 10% (5 million) in 2022 or 4.4% (2.2 million) in 2021, indicating growing interest.
“The tax rules around crypto are quite complicated and there are now a volume of people who are trading in crypto and don’t understand that even if they move from one coin to another, that triggers capital gains tax.”
HMRC’s visibility in the market has improved dramatically. The agency now receives transaction data directly from major crypto exchanges and will automatically access global exchange data from 2026 under the Organization for Economic Co-operation and Development’s (OECD) Crypto Asset Reporting Framework (CARF).
Related: New York State Senator Proposes Crypto Mining Energy Use Tax
US Lawmakers Weigh Crypto Tax Exemption
US senators are exploring updates to crypto tax policy, including exempting small transactions from taxation and clarifying how rewards are treated.
During a Senate Finance Committee hearing earlier this month, lawmakers debated whether to trigger a capital gains tax on daily crypto payments and how to classify revenue from staking services. Coinbase’s vice president of taxation, Lawrence Zlatkin, urged Congress to adopt a de minimis exemption for crypto transactions under $300.
Meanwhile, South Korea’s National Tax Service (NTS) has also stepped up its crackdown on crypto tax evasion, warning that assets stored in cold wallets will also be seized if linked to unpaid taxes.
Magazine: Back to Ethereum – How Synthex, Ronin and Cello saw the light
