UK Tax Authority Moves to Widen Crypto Data Powers as Privacy Coins Rally

HM Revenue and Customs is proposing to extend its information gathering powers to cryptoasset businesses and to change the rules on access to computer records and software, according to a report published on October 8, 2026 by 99Bitcoins and carried by TradingView. Critics warn the proposal could tie together names, home addresses and tax identifiers in ways that make ordinary bitcoin and privacy coin users easier to trace.

The timing matters because the UK move runs against the direction of travel in Washington. The US Treasury's Financial Crimes Enforcement Network said it will take no further action on a 2020 plan that would have required banks and exchanges to record transfers above $3,000 and report those above $10,000, and it dropped a separate plan aimed at crypto mixing on the same day, according to BeInCrypto.

For readers who follow the underground economy, the two decisions describe the same fight from opposite ends. Chain analysis firms depend on exchange level identity data, and mandatory record keeping at the $3,000 threshold is exactly the raw material that turns a public ledger into a map of who sent what to whom. Removing that requirement in the US weakens the pipeline, while adding it in the UK strengthens it.

Markets have already voted on the privacy trade. Zcash has climbed more than 1,000 percent over the past year and back into the top 15 cryptocurrencies by market value, with ZEC up $420 compared with roughly $35 to $40 a year earlier, according to the Bitcoin Foundation. Digital Currency Group chief executive Barry Silbert predicted on Wednesday that 5 to 10 percent of bitcoin holdings will migrate toward privacy focused cryptocurrencies over the coming years, calling them asymmetric opportunities, according to CoinMarketCap Academy.

The technical pipeline is filling in behind the price move. A paper covered by CoinDesk on September 26, 2026 maps private bitcoin denominated transfers that would run alongside Bitcoin using Zcash style cryptography without changing Bitcoin's own rules, though the authors have not finished a way to lock up real BTC and release it again. Separately, a group of former Ethereum Foundation researchers launched a for profit company called EthSystems to build blockchain privacy infrastructure for commercial banks on Ethereum, according to Yahoo Finance.

Distribution is widening too. Zama listed its ZAMA token on Revolut across the European Economic Area on Monday, giving the confidentiality project access to more than 70 million customers and self custody withdrawals, The Block reported on August 11, 2026. Grayscale's quarterly sector note had already flagged what it called a preference for privacy after Q4 2025 marked a pause in crypto's momentum.

What to watch

The next signal is whether the HMRC consultation hardens into rules that force UK cryptoasset businesses to hand over customer records, and whether other tax authorities copy it. On the other side of the ledger, watch whether the Shielded Bitcoin design finds a working lock up mechanism, since without one the privacy it promises stays theoretical. And watch the rotation Silbert describes: if even a fraction of bitcoin capital follows his forecast, exchange compliance teams and tracing firms will be the first to feel it.