France Moves to Require Disclosure of Self-Custodied Crypto Wallets Above €100,000

French lawmakers are pushing forward a measure that would force individuals holding at least €100,000 (approximately $110,000) in self-custodied digital assets to declare those holdings to tax authorities, with penalties of up to €10,000 (approximately $11,000) for non-compliance.

The proposal, designated Amendment I-CF821, was adopted by the National Assembly's Finance Committee on October 9. It targets crypto assets that are not held with a crypto-asset service provider, such as an exchange, but are instead stored in personal wallets controlled directly by the owner.

Under the proposed rules, French residents would be required to report the total value of their self-held cryptocurrencies as of December 31 each year. The measure would add a new provision to the country's general tax code.

The Rationale: A Stark Reporting Gap

The amendment's sponsors — Charles de Courson, Jean-Pierre Bataille, and Michel Castellani, all members of the Liberties, Independents, Overseas and Territories (LIOT) parliamentary group — framed the measure as a necessary tool to combat tax evasion linked to digital assets held outside regulated platforms.

They pointed to a parliamentary inquiry into the taxation of wealthy individuals that revealed a dramatic discrepancy. In 2021, crypto capital gains in France reached approximately €3.5 billion (approximately $3.9 billion). However, only €400 million (approximately $448.4 million) in crypto holdings was declared to tax authorities that same year.