France drops €5,000 self-custody crypto reporting rule

The French National Assembly removed a provision from an anti-fraud bill that would have required taxpayers to report self-custody cryptocurrency wallets holding more than €5,000 to the tax office, the Direction générale des finances publiques (DGFIP). Lawmakers deleted the article during final revisions, allowing the draft law to proceed without the disclosure obligation.

The deleted article would have obliged owners of self-custodied wallets to disclose the value and characteristics of crypto holdings above the €5,000 threshold to the DGFIP. Legislators questioned how the tax authority could verify self-declared wallet contents and raised concerns that the requirement could create security risks for holders.

Adan, a French crypto industry group that promotes adoption and innovation, lobbied administrative offices, government bodies and deputies from November against the reporting duty. The group supported stronger measures to fight fraud but argued that forcing taxpayers to provide detailed wallet information would create an unworkable and dangerous administrative burden.

Deputy Daniel Labaronne earlier proposed a motion to suppress the article, which did not pass at that time. During the bill’s final revision, lawmakers removed the provision and approved the draft without the new disclosure rule.

Opponents of the obligation pointed to practical and safety issues, saying the tax authority would lack a reliable way to check self-reported wallet contents and that expanding government databases of crypto owners could increase the risk of data leaks and targeted criminal attacks.

Industry figures report that France accounts for nearly 40% of so-called wrench attacks in Europe, violent robberies in which assailants force crypto holders to surrender private keys or devices. Executives, including the head of Binance in France and Ledger co-founder David Balland, have been named among those targeted.

Telegram founder Pavel Durov warned that past leaks of tax information have fueled criminal targeting and argued that adding more government-held data on crypto owners would raise security risks.

With the clause removed, taxpayers holding self-custodied cryptocurrency above the €5,000 threshold will not face a new mandatory disclosure to the DGFIP under the current version of the fraud bill. Lawmakers and industry groups may continue to debate other measures to address fraud and illicit activity in digital assets, but the specific reporting requirement has been shelved.