DAC8 Reporting for Neobanks with Crypto Services

Neobanks and digital banks that offer crypto-asset services alongside traditional banking products occupy a unique position under DAC8. These institutions must navigate the intersection of existing financial reporting frameworks and the new crypto-specific obligations introduced by the directive.

When Neobanks Fall Within DAC8 Scope

A neobank that enables its customers to buy, sell, hold, or transfer crypto-assets is likely providing services that qualify it as a Reporting Crypto-Asset Service Provider (RCASP) under DAC8. The critical factor is not the institution's primary license or identity as a bank, but whether it provides crypto-asset services that fall within DAC8's definitions.

Typical crypto services offered by neobanks that may trigger DAC8 obligations include:

• Crypto trading features that allow customers to buy and sell crypto-assets within the banking app.
• Crypto custody where the neobank holds crypto-assets on behalf of customers.
• Crypto-to-fiat conversion integrated into spending or payment features.
• Crypto transfers between customers or to external wallets.

DAC8 vs. Other Financial Reporting Frameworks

Neobanks are already subject to various tax information exchange frameworks, including the Common Reporting Standard (CRS) for financial accounts. A key question is how DAC8 interacts with these existing obligations:

CRS and DAC2

Under CRS (implemented in the EU through DAC2), financial institutions report on financial accounts, including account balances and income. Crypto-asset holdings and transactions were not traditionally covered by CRS, which is precisely why DAC8 was introduced.

Neobanks should expect that:

• Traditional financial accounts (savings, current accounts, investment accounts) continue to be reported under CRS/DAC2.
• Crypto-asset activities conducted through the same institution should be reported under DAC8.
• There may be overlap in user due diligence data, but the reporting itself targets different types of activities and follows different schemas.

Avoiding Duplication

Where a transaction involves both fiat and crypto elements — for example, a customer buying crypto-assets with funds from their bank account — neobanks should be careful not to double-report. The fiat side of the transaction is a bank account activity, while the crypto acquisition is a DAC8 reportable event. Clear internal classification of each transaction component is advisable.

Due Diligence Advantages for Neobanks

Neobanks may have an advantage over crypto-native platforms when it comes to DAC8 due diligence. As regulated financial institutions, neobanks typically already collect extensive customer information, including:

• Full legal name and date of birth
• Verified address
• Tax Identification Numbers (TINs)
• Self-certification of tax residence

Much of this data may already satisfy DAC8's due diligence requirements. However, neobanks should verify that their existing data collection covers all DAC8-specific fields and that the data is maintained in a format compatible with DAC8 reporting.

Reporting Considerations Specific to Neobanks

Integrated User Experience

Neobanks often present crypto services as a seamless part of their banking app, without clear demarcation between traditional and crypto activities. From a reporting perspective, however, these activities should be tracked separately. Neobanks should ensure their back-end systems maintain clear distinctions between:

• Fiat account transactions (reported under CRS/DAC2)
• Crypto-asset transactions (reported under DAC8)
• Hybrid transactions that span both categories

Limited Crypto Functionality

Some neobanks offer limited crypto functionality — for example, allowing customers to buy and sell a small number of crypto-assets but not withdraw them to external wallets. Even in this simplified model, DAC8 reporting should apply to the exchange transactions. The fact that customers cannot transfer crypto-assets externally does not eliminate the reporting obligation for purchases and sales.

Crypto Rewards and Incentives

Some neobanks offer crypto-asset rewards (such as receiving crypto cashback on card spending). These rewards may constitute crypto-asset acquisitions that should be tracked and potentially reported under DAC8.

Operational Considerations

Compliance Team Structure

Neobanks may need to decide whether their existing compliance team handles DAC8 reporting alongside CRS and other obligations, or whether a dedicated team or function is needed for crypto-specific reporting. The answer may depend on the volume and complexity of the institution's crypto services.

Technology Integration

Adding DAC8 reporting to an existing regulatory reporting infrastructure requires careful technology planning. Neobanks should consider whether their current reporting systems can accommodate the additional data requirements or whether new modules or integrations are needed.

Multi-Jurisdiction Considerations

Neobanks operating across multiple EU Member States — which is common for digital-first institutions — should determine their reporting obligations in each jurisdiction and leverage DAC8's single registration mechanism where applicable.

Practical Steps

1. Map crypto-asset services offered and classify each according to DAC8's definitions.
2. Audit existing customer data for DAC8 compliance, leveraging CRS data where possible.
3. Establish clear transaction classification between fiat (CRS) and crypto (DAC8) activities.
4. Review crypto reward programs for potential DAC8 reporting implications.
5. Plan technology integration for DAC8 reporting alongside existing frameworks.
6. Coordinate internally between banking compliance and crypto compliance functions.

Conclusion

Neobanks with crypto services should expect dual reporting obligations — existing financial reporting under CRS/DAC2 and new crypto-asset reporting under DAC8. While neobanks may benefit from existing due diligence infrastructure, the operational challenge lies in cleanly separating and correctly classifying activities across reporting frameworks.

This article provides general information and should not be treated as legal or tax advice. Neobanks should seek professional guidance on their specific obligations under both DAC8 and existing financial reporting frameworks.