The French National Assembly has passed a controversial amendment requiring cryptocurrency holders to disclose any self-custody wallets containing over €5,000 (approximately $5,847) to the country's tax authority, the DGFIP. The measure, part of an anti-fraud law, has drawn criticism even from the DGFIP itself, which admitted it has no means to verify the submitted data and warned it could turn crypto owners into prime targets for cybercriminals.
Key Provisions of the Bill
According to Gregory Raymond, co-founder of The Big Whale, the amendment mandates that funds held in self-hosted wallets—such as MetaMask, Phantom, and even hardware devices like Ledger—must be disclosed if they exceed €5,000. This forces French crypto investors to reveal their personal wealth even when their wallets are not connected to any regulated institution.
Deputy Daniel Labaronne opposed the inclusion of the article, arguing it would be impossible for the DGFIP to verify ownership. “How could it verify whether an individual owns a piano in their home?” he questioned. Despite his objections, the motion to strike the article was defeated.
DGFIP's Opposition
In a surprising turn, the DGFIP itself warned against the amendment. In an email to lawmakers, the agency stated: “A generalized declaration of these portfolios would lead to the centralization of highly sensitive data, such as the identities of the holders and the value of their assets. In a context of frequent cyberattacks against large databases, this information would become a prime target for hackers, entailing heightened risks of fraud.”
France is already a hotspot for ‘wrench attacks’—violent assaults aimed at coercing victims to transfer their crypto assets. Security experts argue that aggregating personal wealth data in a central database would effectively provide criminals with a ready-made list of targets.
Uncertain Future
Despite passing in the National Assembly, the amendment's fate remains unclear. Raymond noted that the French government is hostile to the measure, and the bill must still go through the Senate. He predicts the rule will “probably fail” due to both technical challenges and strong opposition from privacy advocates and some politicians.
The legislative push reflects a broader European trend toward tightening control over decentralized finance. However, critics warn that forcing self-custody users into the traditional tax reporting system undermines the core principles of crypto and introduces significant privacy and security risks. The upcoming Senate review will be a critical juncture.