For years, cryptocurrency investors have operated with a useful, if increasingly misplaced, assumption: that tax authorities cannot see enough to matter. HM Revenue & Customs is working to change that.

The British tax authority has sent 81,000 warning letters to cryptocurrency investors in the past 12 months who it suspects may have underpaid tax, according to accountancy group UHY Hacker Young. That is up 25 per cent from 65,000 letters the previous year, and almost three times the 27,714 sent in 2023-24.

The increase is significant. But it may prove to be merely the opening act. The so-called “nudge” letters give taxpayers an opportunity to disclose underpaid liabilities before a formal investigation begins. For HMRC, they are an…