In a move that has shocked the crypto community, the French National Assembly has passed an article requiring individuals to disclose any funds exceeding €5,000 held in self-custody crypto wallets — including those using MetaMask, Phantom, and even hardware devices like Ledger — to the country’s tax watchdog, the DGFIP. The measure, intended to combat tax fraud, has been met with fierce opposition from both the DGFIP itself and some lawmakers, who argue it will create a centralized database of highly sensitive personal data and expose crypto holders to heightened risks of physical and cyber attacks.
The Bill at a Glance: €5,000 Threshold for Self-Custody Disclosure
According to Gregory Raymond, co-founder of the French crypto media outlet The Big Whale, the article was slipped into a broader anti-fraud bill. It mandates that any funds held in self-hosted wallets — meaning wallets not connected to any regulated institution — must be reported to the DGFIP once they exceed the €5,000 threshold (approximately $5,847 at current exchange rates). The provision applies to popular non-custodial wallets such as MetaMask, Phantom, and even hardware wallets like Ledger, which store private keys offline.
The move was immediately criticized by Deputy Daniel Labaronne, who argued that the DGFIP has no way to verify the ownership of such assets. “Likewise, how could it verify whether an individual owns a piano in their home?” he asked during the debate. Despite his motion to strike the article, the National Assembly voted it down, keeping the provision in the bill.
DGFIP’s Own Warnings: A Prime Target for Hackers
Perhaps the most striking aspect of the development is the DGFIP’s own opposition to the measure. In an internal communication, the agency acknowledged that it “has no tools to verify the data provided by contributors.” More alarmingly, it warned that a generalized declaration of self-custody wallets “would lead to the centralization of highly sensitive data, such as the identities of the holders and the value of their assets.” Adding that “in a context of frequent cyberattacks against large databases, this information would become a prime target for hackers, entailing heightened risks of fraud.”
France has recently witnessed a surge in violent “wrench attacks” targeting crypto holders, with at least 25 individuals charged in connection with kidnapping plots aimed at forcing victims to transfer digital assets. The DGFIP’s caution reflects a real-world security concern: combining the address of a wealthy crypto user with their physical identity in a government database could make them a sitting duck for criminals.
Uncertain Future: Government Hostility May Kill the Provision
Despite passing the lower house, the article’s journey is far from over. Raymond stressed that the measure has a low chance of being enacted as is, because the French government is openly hostile to it. The bill still needs to pass through the Senate and undergo further legislative scrutiny. The government may use its executive power to block or water down the provision, especially given the DGFIP’s strong reservations.
If the provision were to become law, French crypto holders would face a dilemma: comply with the disclosure requirement and risk exposing themselves to hackers and physical threats, or refuse and face potential penalties. However, given the enforcement challenges and political headwinds, many analysts believe the article is more of a symbolic gesture — or a testing ground — than a viable regulatory framework.
Context: France’s Broader Crypto Stance
France has generally been proactive in regulating the cryptocurrency space, implementing licensing requirements for exchanges and pushing for AML/KYC compliance. However, the self-custody disclosure article marks a significant departure by targeting individuals rather than service providers. The move has drawn comparisons to other European efforts to trace self-custodied assets, such as the EU’s proposed anti-money laundering package that requires exchanges to collect information on transfers to self-custody wallets above €1,000.
As the debate continues, crypto holders in France are advised to monitor legislative developments closely. For now, the DGFIP remains unable to verify self-custody holdings, and the government’s opposition suggests the article may never reach the statute book. But the proposal itself signals a growing appetite among lawmakers to extend surveillance into the most secure corner of the crypto ecosystem.