European Commission Issues Formal Notices Under DAC8: What Crypto Businesses Must Know

The European Commission has formally escalated enforcement of the EU’s crypto tax transparency framework by issuing letters of formal notice to several Member States for failing to properly transpose DAC8 (Directive on Administrative Cooperation – 8th amendment) into national law.

This development is highly relevant for crypto-asset service providers (CASPs), fintech companies, exchanges, brokers, custodians, and compliance officers operating in or targeting the European Union.

What Is DAC8 and Why It Matters

DAC8 is the latest expansion of the EU’s long‑standing framework for administrative cooperation in tax matters. Its primary goal is to close tax transparency gaps arising from the growing use of crypto-assets and digital platforms.

Under DAC8, crypto-asset service providers (CASPs) will be required to:

• Identify and perform due diligence on users (individuals and entities)

• Collect data on crypto transactions, including:

  • Purchases and sales

  • Exchanges between crypto-assets

  • Transfers of crypto-assets

• Report this information to national tax authorities

• Enable automatic exchange of information between EU Member States

DAC8 is closely aligned with the OECD’s Crypto‑Asset Reporting Framework (CARF), ensuring global consistency in crypto tax reporting.

Timeline:

• National implementation deadline: 31 December 2024

• Data collection begins: 1 January 2026

• First reporting and exchange of information: 2027

Letters of Formal Notice: What Happened

The European Commission has sent letters of formal notice—the first stage of infringement proceedings—to the following EU Member States for incomplete or incorrect transposition of DAC8:

• Belgium

• Bulgaria

• Cyprus

• Czech Republic

• Estonia

• Greece

• Luxembourg

• Malta

• Netherlands

• Poland

• Portugal

• Romania

• Spain

These countries now have two months to respond and remedy the deficiencies in their national legislation. Failure to do so may result in:

1. A reasoned opinion from the Commission

2. Referral to the Court of Justice of the European Union (CJEU)

3. Potential financial penalties

Impact on Crypto‑Asset Service Providers (CASPs)

Even though the infringement proceedings are directed at Member States, the practical burden of DAC8 falls squarely on CASPs.

Key implications for crypto businesses:

• Stricter KYC and due diligence requirements

• Expanded transaction monitoring and reporting obligations

• Increased cross‑border data sharing with EU tax authorities

• Higher compliance costs and operational complexity

• Greater enforcement risk for non‑compliance

Importantly, DAC8 applies not only to EU‑based CASPs, but also to non‑EU providers offering services to EU residents.

DAC8 and MiCA: A Combined Compliance Challenge

DAC8 does not operate in isolation. Crypto businesses must consider DAC8 alongside:

• MiCA (Markets in Crypto‑Assets Regulation)

• AML/CFT obligations under EU and local laws

• FATF Travel Rule requirements

Together, these frameworks signal a clear regulatory trend: crypto anonymity is ending in the EU.

How Zitadelle AG Supports DAC8 Compliance

At Zitadelle AG, we assist crypto and fintech companies with:

• DAC8 readiness assessments

• Regulatory gap analysis

• CASP compliance structuring

• AML/CFT frameworks aligned with DAC8 and MiCA

• Licensing and regulatory advisory across the EU and offshore jurisdictions

Whether you are an EU‑based CASP or an international crypto platform serving EU clients, early preparation for DAC8 is critical.

Key Takeaway

The European Commission’s formal notices confirm that DAC8 enforcement is no longer theoretical. Regulatory scrutiny is accelerating, and crypto businesses that delay preparation risk operational disruption, penalties, and reputational damage.

Now is the time to act.

For tailored advice on DAC8 compliance and crypto regulation, contact Zitadelle AG.