DAC8 Reporting for Transfer Services

Transfer services — enabling the movement of crypto-assets between addresses — present unique reporting challenges under DAC8. This article examines the specific requirements and practical considerations for CASPs that provide transfer functionality.

Transfer Services Under DAC8

Transfer services under DAC8 include any service that enables a user to send crypto-assets from their account at the CASP to another address. This encompasses internal transfers between users on the same platform, withdrawals to external wallet addresses, deposits received from external addresses, and payment facilitation services that transfer crypto-assets to merchants.

The Classification Challenge

The central challenge for transfer reporting is classifying each transfer correctly. Not all transfers are equal from a reporting perspective:

User-to-user transfers on the same platform. These are clearly reportable. The CASP has information about both the sender and the receiver and can report the transaction from both perspectives.

Withdrawals to external addresses. When a user sends crypto-assets to an external address, the CASP may not know whether the recipient is a third party or the user's own self-hosted wallet. This ambiguity affects how the transfer should be classified and reported.

Deposits from external addresses. When a user receives crypto-assets from an external address, the CASP may not know the source. The deposit itself may not be independently reportable, but it affects the user's activity profile and subsequent transaction reporting.

Travel Rule Integration

The MiCA Travel Rule (and the broader FATF Travel Rule) requires CASPs to collect and share originator and beneficiary information for crypto-asset transfers above certain thresholds. This information, when available, can assist in classifying transfers for DAC8 reporting purposes.

However, Travel Rule data is not always complete, particularly for transfers involving self-hosted wallets or CASPs in jurisdictions that have not yet implemented the Travel Rule.

Reporting Requirements

For reportable transfers, the CASP must report the aggregate gross amount of crypto-assets transferred (in fiat currency equivalent), the total number of units transferred, the total number of transfer transactions, and the direction of the transfer (outgoing or incoming) where applicable.

Conclusion

Transfer reporting requires CASPs to develop robust classification systems that leverage available information — including Travel Rule data, user declarations, and blockchain analytics — to correctly identify and report each transfer. Clear internal policies and consistent application are essential for accurate reporting.