France Targets Undeclared Self-Custody Wallets With Proposed €10,000 Fines

France is considering new tax disclosure requirements for individuals holding at least €100,000 ($112,000) in digital assets outside regulated custody services, with penalties of up to €10,000 for failing to comply.

The proposal was approved by the French National Assembly’s Finance Committee on Friday through amendment I-CF821, submitted as part of discussions on the country’s 2027 budget. It would introduce a new provision into France’s General Tax Code requiring covered individuals to declare the value of their digital asset holdings as of December 31 each year.

The proposed rules would cover assets held outside regulated digital asset service providers, including cryptocurrencies stored in self-custody wallets that allow users to retain direct control over their holdings.

The amendment was submitted by three lawmakers from the Liberties, Independents, Overseas and Territories parliamentary group: Charles de Courson, Jean-Pierre Bataille and Michel Castellani.

The measure has not yet become law and requires further parliamentary approval.

France Targets Large Crypto Holdings Outside Regulated Custody

The proposal seeks to address what its sponsors describe as a gap in tax authorities’ visibility into digital assets held directly by individuals rather than through regulated exchanges or custodians.

Under the proposed framework, individuals meeting the €100,000 threshold would have to report the value of their qualifying holdings at the end of each calendar year. Failure to submit the required declaration could result in a fine of up to €10,000.

The amendment does not propose banning self-custody wallets or requiring users to transfer their assets to regulated providers. Instead, it would impose a disclosure obligation on individuals whose holdings meet the specified threshold.

To support their case, the lawmakers cited findings from a parliamentary inquiry into the taxation of wealthy individuals. According to the figures referenced in the amendment, capital gains from cryptocurrencies reached €3.5 billion in 2021, while French tax authorities received declarations covering €400 million in cryptocurrency holdings that year.

These figures measure different things. Capital gains represent profits generated through transactions such as asset sales, while declared holdings refer to the value of assets reported to the authorities. The figures therefore cannot be directly compared to establish the scale of potential tax evasion.

The lawmakers cited the figures as justification for extending disclosure requirements to substantial digital asset holdings maintained outside regulated custody services.

DAC8 Expands Crypto Tax Reporting Across Europe

The French proposal comes alongside the implementation of the European Union’s DAC8 framework, which took effect on January 1, 2026, and expands tax reporting requirements for crypto-asset service providers.

Under the framework, covered providers must collect information about customers and qualifying transactions, including identifying details and tax identification numbers. The rules are designed to enable tax authorities across participating jurisdictions to exchange relevant information about crypto-asset activity.

Certain transfers involving self-custody wallets can also fall within the reporting framework when they are processed through covered service providers. This does not mean that every self-custody wallet must independently report its transactions under DAC8.

Information collected during 2026 is expected to enter the first reporting cycle in 2027, with the relevant data exchange scheduled by September 30, 2027.

Separately, the Finance Committee approved another amendment on October 8, numbered I-CF1822, concerning digital asset holdings exceeding €800,000. The proposal seeks to bring qualifying holdings within France’s exit tax framework, which can apply to certain financial assets when eligible taxpayers transfer their tax residence abroad.

Neither amendment has received final parliamentary approval.

French Crypto Firms Challenge DAC8 Implementation

France’s implementation of the European reporting framework has also faced legal challenges from parts of the crypto industry.

In September, France’s Council of State rejected an urgent request by crypto companies Bull Bitcoin and Paymium to suspend the national decree implementing DAC8. The companies had sought temporary relief while pursuing a separate legal challenge to the decree.

Bull Bitcoin raised concerns about the security implications of collecting and centralizing personal information belonging to cryptocurrency users.

The court found that the conditions required for emergency suspension had not been met, leaving the decree in force. The decision did not resolve the separate challenge seeking to overturn the measure.

The dispute highlights tensions between authorities’ efforts to improve tax transparency and industry concerns about data security, privacy and the scope of reporting obligations.

Chainalysis Estimates $9.4 Billion in Potentially Taxable Crypto Activity

The debate over crypto taxation has also drawn attention to estimates of digital asset activity in France.

A September analysis by blockchain analytics firm Chainalysis estimated that crypto-related activity potentially falling within taxable categories reached $9.4 billion in France during 2025. The estimate comprised $1.7 billion in crypto income, $2.5 billion in realized gains and $5.2 billion in payments across six blockchain networks examined in the analysis.

Chainalysis cautioned that these figures represent activity that could potentially be taxable, rather than unpaid taxes or revenue already owed to the French government.

Separately, French taxpayers reported €368 million in cryptocurrency capital gains for 2024, across approximately 24,000 tax declarations, according to the figures cited in the source report.

The two estimates should not be treated as directly comparable. The Chainalysis figure covers several categories of crypto-related activity during 2025, including income, realized gains and payments, while the €368 million figure concerns capital gains declared by taxpayers for 2024. The figures also use different currencies and relate to different reporting periods.

Neither figure, on its own, establishes the amount of cryptocurrency income or gains that went undeclared, nor does either quantify unpaid taxes. The data instead offer different perspectives on crypto-related economic activity and the capital gains reported to French tax authorities.

Self-Custody Comes Under Greater Tax Scrutiny

The proposed disclosure requirement would extend France’s tax oversight further into the self-custody segment of the crypto market, where individuals retain direct control over their assets rather than relying on centralized exchanges or custodians.

Combined with DAC8’s reporting framework, the proposal reflects a broader effort to improve tax authorities’ visibility into digital assets held across different platforms and jurisdictions.

Its practical impact will depend on the final legislation, the scope of the declaration requirements and how compliance is enforced. For now, the €100,000 threshold and potential €10,000 penalty remain part of a committee-approved proposal rather than an enacted legal obligation.