French National Assembly Passes Controversial Crypto Wallet Reporting Law

European countries are increasingly tightening regulations on cryptocurrency transactions, with France making a surprising move by passing a bill that mandates reporting of self-hosted wallets holding over €5,000.

The legislation, championed by the French National Assembly, requires users to disclose funds stored in self-custody wallets to the Direction Générale des Finances Publiques (DGFIP), France’s tax authority. Gregory Raymond, co-founder of The Big Whale, predicts that the law may face challenges due to government opposition.

France’s Stricter Stance on Self-Custody Wallets

The article, embedded in an anti-fraud law, aims to combat tax evasion by monitoring cryptocurrency holdings in non-institutional wallets. The DGFIP expressed concerns over potential security risks, as such data could attract cybercriminals targeting crypto owners.

Despite opposition from Deputy Daniel Labaronne, who questioned the feasibility of verifying ownership of assets, the article was upheld. The DGFIP, lacking adequate tools to authenticate provided data, warned of potential vulnerabilities in safeguarding sensitive information.

The proposed law, portrayed as a measure against tax fraud, raises concerns over centralizing personal details and asset values, posing a significant risk of data breaches and fraudulent activities.

“A generalized declaration of these portfolios would expose holders’ identities and asset values, making them susceptible to cyber threats and fraud,” the DGFIP cautioned.

If enacted, holders of wallets like Metamask and hardware devices such as Ledger wallets will be obligated to disclose their funds. However, Raymond highlights the slim chances of the law passing in its current form, given the government’s opposition.