A new proposal from the European Commission would require crypto asset service providers of all sizes and geographic locations to report transactions by EU clients to tax authorities. Companies providing encryption services to EU residents will need to comply with tax reporting rules to close tax evasion loopholes. The European Commission aims to implement the new rules on January 1, 2026. "Tax authorities currently lack the information necessary to monitor gains from the use of crypto assets, which are easily traded across borders," the commission wrote in a statement. "This severely limits their ability to ensure effective tax payments, which means that European citizens lose out on important tax revenue." The news comes after a draft EU tax suggested a levy on cryptocurrencies could bring in $2.5 billion.