Sovos, an Atlanta-based tax compliance company, announced a partnership with Label, a specialized provider of automated FATCA, CRS, and CARF compliance solutions, to introduce a global solution for digital asset platforms to meet the OECD’s Crypto-Asset Reporting Framework (CARF) requirements.
The combined offering, Label CARF + Sovos 1099-DA, aims to address CARF, which mandates comprehensive reporting of crypto transactions. This framework is set to begin in 2027 for the 2026 tax year in participating jurisdictions, as governments globally implement it to enhance tax transparency within the digital asset ecosystem. Crypto exchanges, brokers, custodians, and Virtual Asset Service Providers (VASPs) are facing increased compliance complexity.
CARF requires detailed reporting of client identities and transaction data across various categories, including crypto-to-fiat, crypto-to-crypto transfers, staking rewards, and retail payments, all subject to strict validation and formatting standards.
Wendy Walker, VP of Regulatory Affairs at Sovos, noted the evolving regulatory landscape for digital asset platforms. “CARF reporting now joins existing obligations like 1099-DA, unclaimed property, and traditional tax information reporting,” Walker stated. “Our partnership with Label combines our proven crypto tax compliance capabilities with their specialized CARF expertise. Together, we deliver a unified solution that addresses the full spectrum of digital asset reporting requirements.”Scott Nice, Chief Revenue Officer at Label, elaborated on the challenges of in-house CARF implementation. “Building CARF compliance capabilities in-house is a significant undertaking for digital asset platforms, requiring specialized regulatory expertise, complex data aggregation, and precise XML formatting,” Nice commented. He added, “We’ve developed purpose-built technology that handles this complexity. Partnering with Sovos allows us to embed CARF reporting within the broader tax compliance ecosystem, giving digital asset platforms a proven solution that works alongside their existing reporting obligations.”This partnership enables crypto exchanges, brokers, and custodians to meet the OECD’s global tax transparency requirements. Label’s solution features automated onboarding with tax self-certification collection and real-time validation, transaction aggregation across all crypto categories, and OECD CARF XML generation. The platform integrates with existing FATCA and CRS compliance workflows, allowing financial institutions to manage global regulatory obligations from a single system.
The combined offering automates critical compliance processes, encompassing client onboarding, tax self-certification, real-time transaction aggregation, fiat valuation with foreign exchange rules, and OECD CARF XML generation, which is designed for zero-rejection accuracy.
Financial institutions can integrate CARF reporting into their existing FATCA and CRS workflows, adopting a unified approach to managing global regulatory obligations instead of maintaining separate systems. The solution also provides unified reporting across digital assets and traditional investments via Sovos’ platform, automated cost basis tracking, comprehensive tax ID compliance with automated W-8/W-9 collection and IRS TIN matching, and seamless integration of CARF reporting with 1099-DA, 1099-B, and other tax forms. Additionally, it offers state-level reporting readiness as 1099-DA joins the Combined Federal/State Filing Program and consolidates tax statements to streamline the customer experience.
Walker emphasized the necessity for scalable compliance partners in the digital asset industry. “This partnership positions both companies to serve growing demand as CARF implementation accelerates globally and digital asset platforms seek trusted, proven technology to meet their obligations,” Walker concluded.
Sovos, an always-on tax compliance company, provides the Sovos Compliance Cloud platform, which supports businesses in identifying, determining, and reporting tax obligations worldwide. The company processes over 16 billion transactions annually for more than 100,000 customers, including half of the Fortune 500, across nearly 200 countries.
Label specializes in automated end-to-end compliance software and tax services for FATCA, CRS, and CARF due diligence and reporting. Its team brings together regulatory expertise from financial institutions and engineering talent from companies such as Amazon and NASA. Label serves banks, fintechs, fund managers, and service providers globally, managing multi-jurisdiction FATCA and CRS regulatory filings with a zero-percent XML rejection rate.
