Tax authorities in Denmark have issued a round of letters to cryptocurrency users suspected of being involved in tax evasion, requesting they submit full disclosures on their trading activities. The Skattestyrelsen, which is responsible for collecting tax in Denmark, wrote to suspected crypto traders demanding they submit the data, as well as amending prior tax returns to accurately reflect their crypto trading activities, according to crypto tax startup Koinly. The letters threaten prosecution and hefty fines for failure to comply. The authorities have already gleaned user date from three of the country\u2019s leading crypto exchanges, catching around 20,000 individuals within their investigations. The letters demand individuals submit full details of their crypto trading profits and losses from 2016 to 2018, including from crypto-to-crypto transactions. Crypto traders are expected to submit details of the rates at the point of transaction, as well as explain the reasons behind their transactions to the authorities. Traders are also being asked to submit details of their crypto wallets, as well as a statement of all of their current crypto holdings. Robin Singh, founder of crypto tax firm Koinly, said accounting for tax on crypto trades was notoriously difficult. Filing tax on cryptocurrency trades is a difficult task as crypto traders usually hold several exchange accounts & wallets and freely transfer crypto between them, so there\u2019s no easy way to figure out what the capital gains are for any particular trade. In a further warning to crypto traders, Singh said compliance was likely to become even more stringent in the future, urging crypto users to get their \u201caffairs in order\u201d at the earliest opportunity. \u201cThis is just the first step in the fight against tax evasion and more serious actions are likely to be taken against investors in the future so it is a good idea to get your affairs in order as early as possible,\u201d he said. The action by the Danish authorities is similar to investigations initiated by the U.S. Internal Revenue Service in August, which sent preliminary demands to crypto traders suspected of misrepresenting their earnings for tax. It comes against a backdrop of increasing enforcement globally from tax authorities keen to clamp down on underreported tax from crypto transactions.