French deputy proposes crypto registration

A French deputy has proposed an amendment requiring individuals holding more than 100,000 euros in cryptocurrency to register their wallets with tax authorities, though the measure has raised concerns about potential security risks.

Amendment adopted by Finance Committee

The amendment, adopted by the Finance Committee on October 9 as part of the finance bill, would require individuals to report the existence of cryptocurrency wallets with a value exceeding 100,000 euros to the tax authorities, regardless of whether they have sold any cryptocurrency or realized any profit. The measure was adopted alongside four other fiscal measures.

Deputy cites taxation gap

The deputy, Charles de Courson from the Libertés, Indépendants, Outre-mer et Territoires (LIOT) group, justified the proposal by citing a "black hole" in terms of taxation. According to data from BFM Crypto, out of 3.5 billion euros of capital gains made in 2021 by cryptocurrency investors, only 400 million euros of cryptocurrencies held were declared to the Direction générale des finances publiques (DGFiP) that year.

Concerns about security risks

However, concerns have been raised that requiring registration of cryptocurrency wallets could increase the risk of theft. If the tax authorities have information on individuals with significant cryptocurrency holdings, this data could be vulnerable to leaks, particularly in the event of a cyberattack. A link has already been established between data leaks from cryptocurrency companies or public organizations and the exposure of financial assets, including cryptocurrencies.

Deputy dismisses security concerns

De Courson dismissed these concerns, arguing that the same logic could apply to other assets. "You could say the same thing about the stocks you hold in a small company. If we knew all the holders of gold stock, that could help burglars," he stated. However, physical gold is not currently subject to annual declaration with tax authorities, and its sale can be taxed depending on applicable tax regimes.

Current crypto declaration rules

Holders of cryptocurrencies must declare their capital gains only in two situations: if they sell their cryptocurrencies for traditional currency or if they purchase property with this type of asset. The amendment, while adopted by the Finance Committee, will continue to be debated between the National Assembly and the Senate before a final decision as part of the new 2027 budget.