The EU Directive DAC8 has been in force since January 1, 2026, and with the planned Crypto Asset Tax Transparency Act, crypto platforms will in future be obliged to automatically report all relevant transactions to the tax authorities. The reported data may allow conclusions to be drawn about undeclared crypto income in the past. However, according to a recent press release from the North Rhine-Westphalia tax authorities, government investigators are already able to link many wallets to specific individuals.
Crypto professionals also in financial administration
Germany is increasingly gearing up to fulfill its tasks and duties in the context of criminal prosecution. The State Office for Combating Financial Crime in North Rhine-Westphalia is a particular pioneer in this area, with a focus on combating tax evasion, including in relation to crypto assets.
Purchase of data by tax authorities is common practice
It was recently revealed that the State Office for Combating Financial Crime in North Rhine-Westphalia purchased a data carrier containing more than one terabyte of data on foreign transactions in order to track down tax evaders. It is now quite common for tax authorities to purchase data in order to uncover or prosecute tax evasion.
Voluntary disclosure helps
Crypto investors who have not yet declared their income in Germany should therefore take action as soon as possible. Otherwise, they face criminal proceedings for tax evasion in 2026.
In order to avoid or prevent prosecution, the only option is ultimately voluntary disclosure with exemption from punishment, which is possible in Germany under certain conditions. However, even after the offense has been discovered by the authorities, full disclosure of all undeclared income can still be rewarded with a reduction in punishment.
Further legislative measures are on the way
Meanwhile, German lawmakers are also taking action in other areas and implementing further European requirements for combating organized crime: The law implementing Directive (EU) 2024/1260 on the freezing and confiscation of assets is intended to improve cross-border cooperation in criminal asset recovery and is scheduled to come into force by November 23, 2026, at the latest.
Asset confiscation for self-hosted wallets?
On December 9, 2025, the state cabinet of North Rhine-Westphalia also passed a motion for a resolution by the Bundesrat in which North Rhine-Westphalia and Saxony jointly call on the federal government to promptly submit a draft law for effective asset recovery. The powers of the authorities are to be expanded and, in particular, the introduction of a reversal of the burden of proof is to be examined.
Would you like to receive such news directly to your mailbox every two months? Subscribe to our newsletter Private Clients Update – Assets | Foundations | Succession.
In concrete terms, this would mean that assets whose legal origin cannot be proven could be confiscated by the state in cases of suspicion. Although details are not yet known at this stage and the approach is highly questionable from a constitutional point of view, the objective is clear: investors face the threat of losing their assets in the future if they cannot clearly prove their legal origin. Of course, asset classes whose origin is difficult to determine per se are particularly affected, especially crypto assets, particularly in the case of intensive activity using self-hosted wallets.
Proof of origin of assets helps
Crypto investors (and others) are therefore well advised to document all transactions and the origin of all their assets, including those from the past, in order to secure their assets, and to keep all receipts and records permanently.
The best way to prove legal origin is with a crypto proof of origin that’s tailored to the investor. This helps prevent financial service providers, banks, and crypto platforms from reporting suspected money laundering and starting criminal proceedings.
WINHELLER provides support with voluntary disclosures and proofs of origin
Our team of experts, who have many years of experience with both voluntary disclosures and proofs of origin of assets and have access to their own blockchain analysts, will be happy to support and advise you. Feel free to contact us for a non-binding offer!
