Finance

UAE SCA CARF framework brings strong measures for non-compliance

3 hours ago
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The UAE Securities and Commodities Authority (SCA) has shared its Crypto Asset Reporting Framework (CARF) consultation paper.

This comes as the UAE recently joined the CARF framework. In September 2025, Cryptopolitan reported that the United Arab Emirates (UAE) Ministry of Finance signed a Multilateral Competent Authority Agreement (MCAA) and joined the global Crypto-Asset Reporting Framework (CARF). The UAE framework is scheduled to roll out in 2027, and then the UAE is expected to start sharing data with international tax authorities in 2028.

CARF provides an international standard for the automatic exchange of crypto-asset-related information between tax authorities and is part of the global standards in the exchange of information for tax purposes. Close to 70 jurisdictions have committed to implementing CARF, with most preparing for their first information exchange in 2027 or 2028.

According to SCA, the CARF regulatory initiative will effectively contribute to the development of clear and effective governance standards to enhance the UAE’s commitment to global standards. Feedback is required by November 8th, 2025.

UAE forces exchanges to report crypto deals above $50K

The SCA Consultation paper notes that CARF compels crypto intermediaries such as crypto exchange platforms and crypto custodians to report certain crypto payment transfers, such as disposals and acquisitions, especially those above $50,000.

Under the OECD model, information on retail payment transactions reported under the CARF would be subject to de minimis thresholds, with values exceeding $50,000 requiring specific customer data. The customer in this instance is identified as a crypto-asset user, and their details are exchanged as well.

As for transactions below $50,000, the customer is not reported, the transaction is treated as a transfer under the given rules, and only the recipient (e.g., the merchant) is reported as a crypto-asset user.

UAE to address non-compliance with strong measures

The SCA CARF consultation paper makes it clear that the UAE will take strong measures to address any instances of non-compliance by Reporting Crypto-Asset Service Providers (RCASPs) and reportable users with penalties ranging from AED 20,000 ($5,000) to AED 250,000 ($68,000).

The penalties would cover inaccurate or incorrect information in self-certification, up to failing to submit reports to the relevant regulatory authority, or violations of relevant provisions with the intent to circumvent the CRS regulations.

In some instances, licenses might be suspended or withdrawn.

Six Swiss Exchange, in March, published an article covering CARF, noting that one of the primary risks associated with it is the increased compliance burden on CASPs, as well as issues related to privacy infringements. Additionally, entities might seek jurisdictions with less stringent reporting requirements to avoid compliance, potentially undermining CARF’s effectiveness.

This could have an effect on the UAE and its status as a crypto innovation hub.

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Source: https://www.cryptopolitan.com/uae-sca-carf-framework-non-compliance/