France targets undeclared self-custodied crypto holdings

TLDR

France has advanced a proposal to penalize large undeclared self-custodied crypto holdings, but it is not law yet.

1. Lawmakers approved an amendment requiring self-custodied crypto worth at least 100,000 euros to be declared annually or face fines up to 10,000 euros.
2. The rule targets tax evasion and sits inside a wider package that also covers exit tax, stablecoin swaps, and loss offsets, with implications for self-custody privacy and safety.
3. The proposal still faces multiple votes, and could be modified or dropped, so crypto users should watch the budget debates and any alignment with EU reporting rules.

Deep Dive

1. What France Has Actually Proposed

Frances National Assembly Finance Committee adopted amendment I-CF821, which would add a new reporting duty to the tax code for crypto held outside regulated providers, including hardware and software wallets users control themselves. Holders would have to declare the value of those self-custodied assets as of 31 December when their combined balance is at least 100,000 euros, about 112,000 dollars, or risk fines of up to 10,000 euros for noncompliance, according to multiple reports and a detailed community summary.

Importantly, this is a disclosure obligation, not a ban on personal wallets or a requirement to move coins into custodial platforms. Smaller holders below the threshold would not be captured by this amendment.

2. Broader Tax Package And Self-Custody Risks

The wallet rule is part of a cluster of new crypto tax measures. Other committee-backed proposals include extending exit tax treatment to crypto holdings above 800,000 euros for people moving their tax residence abroad, and making crypto to fiat backed stablecoin swaps taxable from 2027, as described in Crypto.news coverage and a Yahoo Finance analysis.

Sponsors say they are responding to under reported gains, citing an inquiry that estimated 3.5 billion euros of crypto capital gains in 2021 versus only 400 million euros in declared cryptocurrency holdings. Critics worry that a registry of large self custodians could be abused if data leaks, particularly given recent French cases of kidnappings and a tax official jailed for misusing access to target crypto holders, noted in community reporting.

3. Legislative Hurdles And What To Watch

None of these measures is final law. The finance committee later rejected the revenue section of the broader 2027 budget, which means the crypto amendments must be resubmitted and approved in full parliamentary debate starting from the governments original draft, as highlighted in committee coverage.

In parallel, EU level DAC8 rules already require service providers to report certain customer data and some transfers involving self-custody wallets, with cross border data exchange scheduled in 2027. The French wallet disclosure proposal would sit on top of that regime, so changes in either could materially alter the compliance burden.

Conclusion

France is moving toward stricter tax transparency for large self-custodied crypto holdings, framing the change as a way to combat evasion while leaving day to day self-custody intact for smaller users. For high balance holders in France, the main impact would be an annual disclosure requirement and higher audit risk, set against growing worries about data security and personal safety if registries expand. Until the budget process finishes, the proposal remains a live but uncertain risk, and its eventual form will shape how French residents balance self-custody autonomy against reporting and privacy trade offs.