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Even when the DGFIP, France’s tax watchdog, has no way to verify the data submitted, the French National Assembly passed an article establishing that contributors should disclose funds over 5,000 € held in self-custody, affecting wallets like Metamask, Phantom, and even Ledger.
Key Takeaways:
- The French National Assembly passed a bill forcing users to report self-hosted wallets holding over €5,000.
- The DGFIP warns that tracking data for these wallets makes users prime targets for hackers.
- Gregory Raymond predicts that this rule will probably fail, as the government is hostile towards it.
France Surprises With Self-Custody Wallet Disclosure Article In Anti-Fraud Law
European countries, including France, are moving to exert more control over the cryptocurrency funds held in self-custody.
According to Gregory Raymond, co-founder of The Big Whale, the French National Assembly passed an article establishing that funds held in self-hosted wallets, meaning that they are not connected to any public institution, should be disclosed to the DGFIP, France’s national tax watchdog, when they account for over 5,000 € ($5,847 at the time of writing).
Deputy Daniel Labaronne opposed the inclusion of this article in the law, arguing it would be impossible for the DGFIP to ascertain the ownership of these assets. “Likewise, how could it verify whether an individual owns a piano in their home?” he asked. Nonetheless, the motion to suppress the article was defeated.
The measure, framed as another move to fight tax fraud, was taken against the DGFIP and the French government recommendation, as the agency acknowledged that it had no tools to verify the data provided by contributors.
The DGFIP warned about the effects of such a measure on the security of French citizens, as the country is a hotbed for wrench attacks targeting crypto holders. In an email, the agency stated:
“It should be noted that 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 this regard, it was ratified that “in a context of frequent cyberattacks against large databases, this information would become a prime target for hackers, entailing heightened risks of fraud.”
If finally passed, all funds held in wallets like Metamask, Phantom, and even in hardware devices like Ledger wallets will have to be disclosed by crypto holders. Nonetheless, Raymond stressed that the measure has a low chance of passing as is, as the government is hostile to it.