Systematic Review: Cryptocurrency and Tax Evasion, Legal Gaps and Regulatory Responses in the Post-Blockchain Era

Abstract

This systematic review aims to Identify legal gaps enabling cryptocurrency-related tax evasion, evaluate global regulatory responses and their effectiveness in mitigating these gaps, propose a solution model to enhance tax compliance in the cryptocurrency ecosystem, and recommend directions for future research to address persistent challenges. This systematic review applies the PRISMA methodology to synthesize 38 peer-reviewed articles (2020–2025) on cryptocurrency-related tax evasion, focusing on legal gaps and regulatory responses in the post-blockchain era. Cryptocurrencies, enabled by decentralized blockchain technology, challenge tax authorities due to their pseudonymous, cross-border nature. Key findings reveal regulatory fragmentation, enforcement challenges, and emerging frameworks, such as the EU’s Markets in Crypto-Assets (MiCA) regulation and the OECD’s Crypto-Asset Reporting Framework (CARF). A proposed solution model emphasizes international cooperation, blockchain analytics, and standardized tax classifications. The review emphasizes the importance of addressing legal gaps to curb tax evasion while promoting innovation, providing policy recommendations, and outlining future research directions. Future studies should evaluate GCTF’s feasibility, explore privacy-preserving analytics, and investigate global tax treaties. By addressing these issues, policymakers can ensure fiscal accountability while fostering a sustainable cryptocurrency ecosystem. It is expected that if the findings of the study are followed, it will help in reducing tax evasion, enhancing global cooperation, increasing compliance via automation, and balancing innovation.