Self-Custody Wallet Declaration: Legal Analysis of the December 9, 2025 Amendment

What does the text actually say? What obligations? What risks?

December 2025 | Legal analysis | Reference document

Table of Contents

1. Introduction: A Controversial Amendment
2. Full Text and Genesis
3. Detailed Legal Analysis
4. Scope and Application
5. Identified Legal Problems
6. Technical Unenforceability
7. Risks for Taxpayers
8. Response Strategies
9. Perspectives and Legal Challenges
10. Sources and References

1. Introduction: A Controversial Amendment

December 9, 2025: obligation to declare all your self-custody wallets exceeding €5,000.

On December 9, 2025, the Finance Committee of the French National Assembly adopted an amendment requiring individuals to submit an annual declaration of the value of their self-hosted crypto portfolios (self-custody) exceeding €5,000 in value.

This amendment triggered a fierce controversy in the French crypto ecosystem and raises fundamental legal questions.

1.1 Context of Adoption

The amendment is part of the Finance Bill for 2026 (PLF 2026), examined in a context of:

• Budget crisis: Search for new tax revenues
• Rising crypto assets: Bitcoin above $100,000
• Tracing failure: DAC8 does not cover self-custody
• Political pressure: "All citizens must contribute"

1.2 Ecosystem Reaction

The Association for the Development of Digital Assets (ADAN) immediately reacted:

"These measures are indeed aberrant and ADAN has been mobilized on the subject for several days. The objective of these amendments is to impose the declaration of crypto portfolios, when no taxable event has been identified. This is extremely problematic."

Source: Claire Balva (@ClaireBalva), December 11, 2025

2. Full Text and Genesis

The amendment presumes that self-custody is a privileged instrument of tax fraud.

2.1 Amendment Summary

"This amendment aims to improve the tax authorities' visibility regarding portfolios and transactions managed without Digital Asset Service Providers (PSAN).

[...]

These wallets, given the total lack of transparency, are a privileged instrument for reducing the tax base, and therefore a privileged instrument of tax fraud."

Source: Summary of rationale, National Assembly, December 9, 2025

2.2 Modified Article

The amendment supplements Article 1649 AC bis of the General Tax Code (CGI).

Proposed new wording:

"Individuals who are tax residents of France [...] are required to declare annually, as part of their income tax return, the market value as of January 1 of digital assets held in wallets not hosted by a digital asset service provider, when this value exceeds €5,000."

2.3 Threshold and Procedures

2.4 Applicable Sanctions

The amendment refers to general sanctions for failure to declare:

3. Detailed Legal Analysis

A declarative obligation with no associated tax: a major legal anomaly.

3.1 Legal Classification

The amendment creates a new declarative obligation, distinct from the obligation to declare capital gains (Article 150 VH bis CGI).

Nature of the obligation:

• Declaration of wealth, not income
• Similar to IFI (declaration of value without sale)
• But with no associated tax (for now)

3.2 Break with the Triggering Event Principle

In French tax law, capital gains tax is triggered by a taxable event (fait generateur): the sale.

Critical point: The amendment imposes an obligation without any taxable event being triggered.

3.3 Comparison with IFI

The amendment bears similarities with the Real Estate Wealth Tax (IFI — Impot sur la Fortune Immobiliere):

Major difference: IFI generates a tax. The crypto amendment generates only surveillance.

4. Scope and Application

All French tax residents holding more than €5,000 in self-custody.

4.1 Who Is Concerned?

Subject persons:

• French tax residents (tax domicile in France)
• Individuals only
• Holding crypto assets in self-custody
• With a value exceeding €5,000 as of January 1

Exclusions:

• Non-tax residents
• Legal entities (companies)
• Crypto assets on regulated platforms (already covered by DAC8)
• Value below €5,000

4.2 What Is a "Non-Hosted Wallet"?

The amendment targets wallets where the user alone controls their private keys:

4.3 What "Market Value"?

The amendment requires declaring the "market value" as of January 1, without specifying:

• The price source to use
• The treatment of unlisted tokens
• The method for NFTs
• The EUR/crypto exchange rate

Open questions:

5. Identified Legal Problems

Absence of triggering event, privacy violation, and breach of tax equality.

5.1 Absence of Taxable Event

Fundamental principle: In French tax law, a declarative obligation must correspond to a tax or a tax base.

"The taxable event is the event or legal situation that gives rise to the tax obligation."

Source: Tax doctrine, general principles

Problem: The amendment creates a declarative obligation with no associated tax. This is legally atypical and potentially unconstitutional.

5.2 Privacy Violation

The mandatory declaration of crypto wealth raises questions of proportionality:

Article 2 of the Declaration of the Rights of Man and of the Citizen (DDHC): "The aim of every political association is the preservation of the natural and imprescriptible rights of Man. These rights are liberty, property, security, and resistance to oppression."

Article 8 of the European Convention on Human Rights (ECHR): Right to respect for private life.

Grounds for challenge:

• Surveillance without a taxation motive
• Disproportion between the objective (fight against fraud) and the means (universal declaration)
• Security risk linked to creating a database

5.3 Breach of Equality

Article 13 DDHC: "For the maintenance of the public force and for administrative expenses, a common contribution is indispensable: it must be equally apportioned among all citizens according to their means."

Problem: Why impose a declaration on crypto holders and not on holders of other assets (physical gold, works of art, collections)?

5.4 Presumption of Fraud

The amendment's summary of rationale states that self-custody wallets are "a privileged instrument of tax fraud."

Problem: This claim:

• Is not supported by data
• Presumes users' guilt
• Ignores legitimate uses of self-custody (security, sovereignty)

"The use of a self-hosted wallet is a recommended security practice, not an indicator of fraud."

Source: ADAN position, December 2025

6. Technical Unenforceability

The tax authorities cannot verify the existence of self-custody wallets: enforcement is impossible.

6.1 The Impossibility of Verification

Fundamental problem: The tax authorities cannot verify the existence of a self-custody wallet.

6.2 How Could the Authorities Know?

Only partial leads:

1. Blockchain analysis: Tracing withdrawals from exchanges

   • Limited: only shows addresses, not owners
   • Costly: requires specialized tools
   • Incomplete: does not cover P2P purchases

2. Self-reporting: Relying on taxpayer honesty

   • Depends on good faith
   • No means of verification

3. Data cross-referencing: Exchange → address → declaration

   • Partial: only covers traceable flows
   • Delayed: analysis lag times

6.3 The Self-Reporting Paradox

+---------------------------------------------------------------------+
|                    POSSIBLE SCENARIOS                                 |
+---------------------------------------------------------------------+
                              |
          +-------------------+-------------------+
          v                   v                   v
+-----------------+ +-----------------+ +-----------------+
| HONEST          | | CAUTIOUS        | | FRAUDULENT      |
| TAXPAYER        | | TAXPAYER        | | TAXPAYER        |
|                 | |                 | |                 |
| Declares        | | Declares the    | | Declares        |
| everything      | | minimum         | | nothing         |
| correctly       | |                 | |                 |
+-----------------+ +-----------------+ +-----------------+
        |                   |                   |
        v                   v                   v
+-----------------+ +-----------------+ +-----------------+
| Filed and       | | Risk of         | | No              |
| exposed to      | | involuntary     | | consequences    |
| data leaks      | | under-reporting | | (unverifiable)  |
+-----------------+ +-----------------+ +-----------------+

Conclusion: The amendment penalizes the honest and leaves fraudsters undisturbed.

6.4 The Security Risk of the Database

Creating a national database of crypto asset holders creates a prime target for:

• Cybercriminals
• Hostile foreign states
• Malicious insiders

Ledger precedent (2020): Leak of the Ledger customer database → 270,000 customers exposed to phishing attempts, physical threats, etc.

7. Risks for Taxpayers

Filing, fines, and the risk of a crypto wealth tax: the dangers of declaration.

7.1 Sanctions for Non-Declaration

If the amendment is definitively adopted, failure to declare will result in:

7.2 The Declaration Trap

The danger of good faith:

7.3 The Shadow of a Crypto IFI

Credible hypothesis: The declarative obligation is preparing a crypto wealth tax.

Indicators:

• Very low €5,000 threshold (vs. €1.3 million for IFI)
• Declaration of value as of January 1 (like IFI)
• Political rhetoric about "crypto-rich who don't pay"

Possible future scenario:

8. Response Strategies

Full compliance, corporate restructuring, or relocation: three options to evaluate.

8.1 Legal Options

Warning: The following strategies aim for legal compliance. Any attempt at fraud exposes one to criminal sanctions.

Option 1: Full compliance

• Declare the exact value as of January 1
• Document precisely (screenshots, exports)
• Keep supporting documents for 6 years

Option 2: Minimal compliance

• Declare only if value > €5,000
• Strict interpretation of the threshold
• Value at the lowest end of a reasonable range

Option 3: Restructuring before entry into force

• Transfer to a company (outside the scope of the amendment)
• Tax relocation
• Anticipatory donation

8.2 Corporate Structuring

The amendment targets individuals. Companies are not covered.

Possible strategy:

1. Create a SAS or SASU (simplified joint-stock company)
2. Contribute crypto assets as a capital contribution in kind
3. Hold assets through the company

Caution: The contribution may trigger a taxable capital gain for the contributor.

8.3 The Relocation Option

Only French tax residents are subject to the obligation.

Alternative countries (with precautions):

Exit tax: Leaving France with wealth exceeding €800,000 triggers an exit tax on unrealized capital gains.

8.4 Defensive Documentation

Regardless of the strategy chosen, document everything:

9. Perspectives and Legal Challenges

The remaining legislative path and possible constitutional challenge routes.

9.1 Remaining Legislative Path

The amendment must still pass several stages:

9.2 Possible Legal Challenges

Priority Question of Constitutionality (QPC):

A QPC could be raised on the following grounds:

• Disproportionate violation of privacy
• Breach of equality before public charges
• Absence of a triggering event justifying the obligation

ECHR Recourse:

If the QPC fails, an appeal before the European Court of Human Rights could be considered for violation of Article 8 (private life).

9.3 Ecosystem Lobbying

ADAN and other ecosystem actors are mobilized:

"ADAN calls on parliamentarians to reject this amendment which:

1. Is legally fragile
2. Is technically unenforceable
3. Penalizes honest users
4. Creates a major security risk"

Source: ADAN position, December 2025

9.4 Evolution Scenarios

Related Articles -- Legal Analyses

• Requisitions Lpm Precedents Jurisprudence
• Bitcoin Societe Sas Holding Treasury Strategy
• Satd Crypto Saisie Protection Legale
• Controle Fiscal Crypto Procedure Defense
• Defi Reglementation Echappe Controle

10. Sources and References

Legislative Texts

• Amendment to PLF 2026, Finance Committee, December 9, 2025
• Article 1649 AC bis of the General Tax Code (current and modified versions)
• Article 150 VH bis of the CGI (crypto capital gains regime)

Administrative Doctrine

• BOI-RPPM-PVBMC-30-10: Crypto asset regime
• BOI-CF-CPF: Tax audit procedures

Institutional Positions

• ADAN, Position on the self-custody amendment, December 2025
• AMF, Observations on the Finance Bill 2026

Constitutional Case Law

• CC, Decision No. 2019-796 DC (Finance Act 2020)
• CC, Decision No. 2012-662 DC (Validity of declarative obligations)

Doctrinal Analyses

• CMS Francis Lefebvre, "Self-custody amendment: legal analysis", December 2025
• Droit fiscal, "Crypto assets and declarative obligations", January 2026

Appendix: Calendar of Crypto Declarative Obligations (if amendment adopted)

Document written in December 2025

This document is provided for informational purposes only. The amendment analyzed has not been definitively adopted. Consult a tax attorney for your personal situation.