Understanding the Differences Between FATCA, CRS, and CARF

Understanding the Differences Between FATCA, CRS, and CARF


i. A Reporting Crypto-Asset Service Provider (RCASP) reports on relevant transactions rather than income or asset value, specifically for reportable Crypto-Asset Users.

ii. Under CARF, the reporting party is any entity or individual conducting a relevant transaction.

iii. Crypto assets that have never been transacted—for example, Bitcoin purchased years ago and held without further activity—are only reported once a transaction occurs. In effect, this approach is akin to waiting for a submarine to surface before attacking.
A major difference between CRS/FATCA and CARF arises from the infamous “shell bank loophole” identified by the U.S. Senate Finance Committee. Under FATCA and CRS, Professionally Managed Investment Entities (PMIEs) are not required to report on themselves.

CARF addresses this issue by looking through PMIE account holders and reporting on their controlling persons, regardless of the parent entity’s status. The PMIE remains classified as a Financial Institution (FI), resulting in potential duplicate reporting by both the PMIE and the underlying Crypto-Asset Service Provider (CASP).

TIMESTAMPS:
0:00 – INTRO
0:59 – Overview of systems
1:06 – CAF reports transactions
1:33 – Transaction timing explained
2:20 – CRS versus CARF
3:06 – FATCA CRS audit
3:52 – Passive NFE classification
4:28 – Major differences summarized
4:31 – OUTRO
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