German customs could secure suspicious crypto assets for an initial 30 days. Investigations generally target holdings exceeding €100,000. Owners can remain silent, but voluntary disclosures m
Germany’s Bundestag approved legislation on November 12 granting customs authorities new powers to investigate and temporarily secure valuable assets of suspected unlawful origin, including cryptocurrency, without first opening criminal proceedings.
The reform, known as the Zollfinanzgerechtigkeitsgesetz, introduces an administrative procedure for examining unexplained wealth. Authorities would be able to intervene before prosecutors establish suspicion of a specific criminal offense, subject to statutory conditions and judicial safeguards.
Finance Minister Lars Klingbeil welcomed the decision, saying the government was taking a tougher approach against criminals while reducing administrative burdens on law-abiding citizens and businesses.
The legislation still requires Bundesrat approval and formal promulgation before its planned implementation on January 1, 2027.
The reform amends Germany’s Zollkriminalitätsbekämpfungsgesetz (ZollKrimBG), introducing new provisions governing the investigation and securing of suspicious property.
Under proposed §54, the general threshold for significant assets is €100,000. A lower €50,000 threshold applies to certain assets requiring registration in public registers, including vehicles and real estate.
Cryptocurrency is covered through the definition established in Article 3(1)(5) of the EU’s Markets in Crypto-Assets Regulation (MiCA).
The legislation does not impose the lower threshold on ordinary cryptocurrency holdings simply because they are recorded on a blockchain.
Asset value alone is insufficient to establish unlawful origin. Customs authorities must identify factual circumstances supporting their doubts, such as inconsistencies between known financial resources and the acquisition of valuable property.
The framework is detailed in the government’s Drucksache 21/8282, subsequently amended through the Finance Committee’s Drucksache 21/9136.
Proposed §56 establishes an initial securing period of up to 30 days, during which customs authorities may investigate the origin of eligible assets.
A fiscal court can authorize one extension of up to 150 additional days, provided the statutory requirements are met.
The ordinary investigative period can therefore reach 180 days. However, the deadline is not an unconditional guarantee that the assets must be returned after six months.
Under §60, filing an application for permanent confiscation suspends the relevant time limits until the court reaches a legally binding decision.
The procedure also raises practical questions about cryptocurrency custody.
Assets held through centralized exchanges may be subject to enforcement measures directed at the intermediary. Self-custodied Bitcoin presents a different challenge because authorities cannot unilaterally block transactions on the blockchain.
Investigators would need to use legally available measures to obtain control over the relevant assets or enforce restrictions against the persons involved.
The reform expressly recognizes crypto-assets as property rights that can be secured through applicable enforcement procedures. It does not provide customs officials with unrestricted technical access to private keys.
Proposed §58 contains one of the legislation’s most consequential protections.
Customs authorities may request information and documents establishing the lawful origin of suspicious property, but affected individuals must be informed that they are not obliged to provide explanations.
Voluntary cooperation carries a separate consideration: information supplied during the administrative procedure may also be used in tax or criminal proceedings.
An investigated cryptocurrency holder could therefore face a difficult choice. Providing transaction histories might establish legitimate acquisition, while exposing unrelated financial activity to further examination.
The Finance Committee also amended the legislation to permit false statements to be considered when assessing doubts about an asset’s origin.
Permanent confiscation would require a fiscal court ruling rather than an administrative decision alone. Lawmakers strengthened judicial oversight by assigning confiscation decisions to a panel of judges.
The German Federal Bar Association has raised concerns about the proposed framework’s procedural safeguards, adding a legal dimension to the debate over how far authorities should be permitted to intervene before criminal wrongdoing has been established.
The customs legislation does not itself abolish Germany’s existing tax treatment of qualifying private cryptocurrency disposals.
Under §23 of the Income Tax Act (EStG), gains from privately held cryptocurrency generally fall outside the taxable holding period after more than one year, subject to the applicable legal conditions.
The Federal Ministry of Finance’s March 2025 guidance addresses the treatment of cryptocurrency transactions, including acquisition dates, disposals and recordkeeping.
A tax-free sale does not automatically establish that the original acquisition was financed through lawful sources.
Conversely, incomplete historical transaction records do not independently prove illegal acquisition.
The proposed customs procedure concerns the investigation and potential confiscation of suspicious assets, rather than changing the taxation of cryptocurrency gains.
The Bundestag approved the legislation following amendments proposed by its Finance Committee. The governing CDU/CSU and SPD parliamentary groups supported the bill, alongside the AfD. Die Linke opposed it, while the Greens abstained.
The Bundesrat had already considered the government proposal during its first legislative review in September. Its approval remains necessary before the law can be completed.
The broader reform also reorganizes customs administration and strengthens its ability to investigate international money laundering and organized financial crime.
For cryptocurrency holders, the decisive legal questions will concern the evidence customs authorities use to justify securing digital assets and the standard fiscal courts apply when considering permanent confiscation.
The first contested cases involving self-custodied cryptocurrency could establish how ownership records, wallet histories and other evidence are evaluated when the lawful origin of digital assets is disputed.
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