France is preparing to tighten rules for cryptocurrency holders. A new proposal mandates the reporting of private cryptocurrency wallets valued at least 100 thousand euros. Failure to comply could result in a fine of up to 10 thousand euros for investors. Another measure aims to tax unrealized gains of wealthy investors when relocating abroad. The changes are not yet approved and await further parliamentary debate.
French lawmakers have decided to take a tougher stance on cryptocurrency owners. The Finance Committee of the National Assembly supported several amendments to the 2027 budget, which aim to enable the financial administration to more rigorously control digital assets. These measures do not only concern trading through cryptocurrency exchanges but also investors who store their funds in their own wallets.
According to a proposal submitted by MP Charles de Courson, French tax residents would have to declare self-managed cryptocurrency wallets with an aggregate value of at least 100 thousand euros to the financial administration. The decisive factor would be the value of the assets held as of December 31 of the respective year.
If an investor fails to comply with this obligation, they could face a penalty of up to 10 thousand euros, which is approximately a quarter of a million Czech crowns.
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Private Wallets Also to Come Under Control
The proposed change primarily targets so-called self-custody wallets. This is a method of storing cryptocurrencies where the user holds their own private keys and exercises direct control over their funds. Unlike cryptocurrencies stored on an exchange, an investor is thus not dependent on an external service provider for managing their assets.
This method of holding cryptocurrencies has, until now, represented a more difficult area for financial authorities to control. French taxpayers are already obliged to declare cryptocurrency accounts held with foreign providers, but the new proposal would extend control to assets stored outside these platforms.
The authors of the measure primarily argue that it aims to curb tax evasion. In the justification for the proposal, they highlight the discrepancy between estimated gains from cryptocurrencies and the amounts investors report to tax authorities.
According to data cited in the parliamentary document, capital gains for French cryptocurrency investors reached approximately 3.5 billion euros in 2021, while only about 400 million euros were reported to the tax administration. However, as Euronews reported, the French Court of Auditors subsequently clarified that the latter amount represented declared profits, not the total value of held cryptocurrencies.
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Relocating Abroad Could Become More Expensive for Wealthy Investors
However, mandatory reporting of cryptocurrency wallets is not the only change being pushed by French MPs. Another measure involves extending the so-called exit tax, which is the taxation of unrealized capital gains when a tax resident moves abroad.
This mechanism already applies in France to certain equity participations and securities. Now, according to an amendment proposed by MP Nicolas Sansu, it could also apply to cryptocurrency portfolios with a total value exceeding 800 thousand euros.
The measure would apply to investors who have been French tax residents for at least six of the preceding ten years and subsequently move their tax domicile to another country.
Crucially, the tax would also be based on unrealized gains. An investor could therefore find themselves in a situation where a tax liability arises from the increase in the value of cryptocurrencies, even if they have not yet sold them. Nevertheless, the proposal also adopts the payment deferral and potential extinction of tax liability mechanisms that exist for the current exit tax.
Proponents of the change argue that there is no reason to favor cryptocurrency holders over stock investors. According to them, digital assets allow for easier cross-border transfer of wealth, which can create opportunities for tax optimization.
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Stricter Controls Also Raise Security Concerns
However, the tightening of rules also raises questions about privacy protection. Critics point out that registering holders of significant cryptocurrency assets could pose a security risk, especially if sensitive information falls into the wrong hands.
Concerns are not merely theoretical. In recent years, France has seen a series of violent attacks and kidnappings related to cryptocurrencies. One of the most well-known cases was the kidnapping of Ledger hardware wallet co-founder David Balland and his partner in January 2025. The attackers then demanded a ransom in cryptocurrencies.
For proponents of decentralized finance, these new proposals represent a further intrusion into privacy, while their proponents consider them a necessary tool to curb tax fraud.
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New Rules Are Not Yet Final
Although the Finance Committee supported some of the measures, their implementation is not yet certain. The committee subsequently rejected the revenue part of the 2027 budget proposal, and therefore the amendments must go through another vote in the plenary session of the National Assembly.
Further parliamentary debate begins on Tuesday, October 13. The vote on the revenue part of the budget is scheduled for October 20, and on the entire proposal for November 17. Subsequently, the Senate is also expected to address it.
If lawmakers approve the measures, France would significantly expand its capacity for tax control over cryptocurrency assets. The outcome of the legislative process could therefore be an important signal for other European states, which are also seeking a balance between cryptocurrency regulation, tax collection, and investor privacy protection.
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