Do Crypto Exchanges Report Income?

[yngmind]

A friend of mine recently moved to Spain and became a tax resident there. He is not an EU citizen but has obtained residency in Spain.

He earns a decent income from his YouTube videos promoting crypto exchanges. His earnings are received in his crypto exchange account, where he has completed the KYC process.

He hasn't updated the KYC information to reflect his residency in Spain because it would prevent him from trading futures, which he relies on. If you're unaware, EU residents are generally restricted from trading futures.

The question is: will the crypto exchange report his income to his home country or to Spain? Well, it's not a broker, do they have the obligation to? I've heard that crypto exchanges report EU residents' income to their country of residency.

The concern is that he has accessed his Bybit account multiple times from a Spanish IP address. This might trigger Bybit to ask him to complete the KYC process again and explain why he's accessing the account using a Spanish IP. Binance once asked me to do that because I hadn't accessed my Binance account from my KYC country for 6 months or so.

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[Nw1]

His earnings are received in his crypto exchange account-> Recommend him to move that earning to another CEX or cold wallet or if that CEX went bankrupt he basically worked for free...

EU also halts any USDT trades

Since he not update his KYC crypto exchange won't know as long as he uses an IP of earlier country. And crypto exchange does reporting if only their incoporation country requires them to do so, so if he do new KYC as EU then his income can be reported

 

[0xDEADBEEF]

Not officially until 01/01/2026: https://www.europarl.europa.eu/RegData/etudes/BRIE/2023/739310/EPRS_BRI(2023)739310_EN.pdf

 

[JackAlabama]

eudssr developing faster and stronger than expected. Ursula approves.

OPs friend should leave spain.

 

[PinkCat]

Not sure where you get your information that exchanges will ask you KYC or report based on IP. I've never accessed any exchange from my country's IP (Always use VPN for security reasons) and never had KYC or reports based on that.

However, the information they will start reporting in 2026 to home country is interesting. Worth it to dig further into that.
Exchanges based in which countries will be required to do that?

 

[JackAlabama]

PinkCat said:
Not sure where you get your information that exchanges will ask you KYC or report based on IP. I've never accessed any exchange from my country's IP (Always use VPN for security reasons) and never had KYC or reports based on that.

However, the information they will start reporting in 2026 to home country is interesting. Worth it to dig further into that.
Exchanges based in which countries will be required to do that?
Click to expand...

maybe under carf. like crs banks can report to passport country, home country or whatever.

 

[brianK]

If you look at the major exchanges like Kraken and Binance, they have always required KYC if you want an account without limitations.

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