Definition ∞ Reporting Service Providers are entities, including crypto exchanges, wallet providers, and other intermediaries, that are legally required to collect and transmit financial data to tax authorities or other regulatory bodies. These providers facilitate compliance with international information exchange standards. Their function is crucial for ensuring transparency and preventing tax evasion in the digital asset market.
Context ∞ The responsibilities of reporting service providers are significantly expanding with the advent of new frameworks like CARF and DAC8. These entities face the challenge of implementing robust systems for data collection, verification, and secure reporting across diverse user bases and jurisdictions. This necessitates considerable investment in technology and compliance personnel.
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