Sovos and Label have announced a partnership aimed at delivering comprehensive CARF reporting capabilities for digital asset platforms.
Through Label CARF + Sovos 1099-DA, the companies are offering a global solution to help platforms comply with the OECD’s CARF rules, which will require reporting of digital asset transactions from 2027 for the 2026 tax year in participating jurisdictions.
The partnership has been formed in response to mounting regulatory pressure on digital asset platforms as governments move to close tax transparency gaps. As jurisdictions adopt CARF, digital asset exchanges, brokers, custodians and Virtual Asset Service Providers (VASPs) are facing increasingly complex compliance obligations.
These include detailed reporting of client identities and transaction data across crypto-to-fiat trades, crypto-to-crypto transfers, staking rewards and retail payments, all subject to strict formatting and validation standards.
Sovos operates as a tax compliance company supporting organisations with global regulatory reporting requirements across multiple tax frameworks. Its capabilities span digital asset reporting, traditional tax information returns and regulatory obligations such as 1099-DA, unclaimed property and other tax forms.
The company positions itself as a provider of integrated compliance infrastructure designed to help firms manage cross-border reporting in a consistent and scalable way.
Label specialises in automated compliance solutions for FATCA, CRS and CARF. Its technology includes automated onboarding with tax self-certification collection, real-time validation of data, transaction aggregation across crypto categories and generation of OECD CARF XML files. The platform is built to integrate with existing FATCA and CRS workflows, enabling financial institutions to manage global tax transparency requirements within a single system.
Under the partnership, digital asset platforms will be able to avoid developing CARF capabilities internally. The combined solution automates processes from onboarding and tax self-certification to transaction aggregation, fiat valuation aligned with foreign exchange rules and CARF XML generation. It also supports unified reporting across digital assets and traditional investments via the Sovos platform, automated cost basis tracking, W-8 and W-9 collection with IRS TIN matching, and integration of CARF reporting with 1099-DA, 1099-B and other forms. The offering also addresses state-level reporting requirements as 1099-DA joins the Combined Federal/State Filing Program and enables consolidated tax statements across asset classes.
The companies state that the partnership is designed to support growing demand as CARF implementation accelerates globally. By embedding CARF reporting within a broader tax compliance ecosystem, the joint solution aims to remove data silos and reduce the operational burden associated with maintaining separate compliance systems for each reporting framework.
Sovos VP of Regulatory Affairs Wendy Walker said, “Digital asset platforms are navigating an increasingly complex regulatory landscape, CARF reporting now joins existing obligations like 1099-DA, unclaimed property, and traditional tax information reporting. Our partnership with Label combines our proven crypto tax compliance capabilities with their specialized CARF expertise. Together, we deliver a unified solution that addresses the full spectrum of digital asset reporting requirements.”
Label chief revenue officer Scott Nice said, “Building CARF compliance capabilities in-house is a significant undertaking for digital asset platforms, requiring specialized regulatory expertise, complex data aggregation, and precise XML formatting. We’ve developed purpose-built technology that handles this complexity. Partnering with Sovos allows us to embed CARF reporting within the broader tax compliance ecosystem, giving digital asset platforms a proven solution that works alongside their existing reporting obligations.”
Walker added, “The digital asset industry needs compliance partners who can scale with the rapid pace of regulatory change. This partnership positions both companies to serve growing demand as CARF implementation accelerates globally and digital asset platforms seek trusted, proven technology to meet their obligations.”
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