In North Rhine-Westphalia, financial investigators are once again analyzing a large data package from a crypto platform. Around 4,000 accounts are in focus. For many crypto investors, this could be the starting point for new inquiries and audits – not because authorities are "hunting," but because the enforcement of digital tax laws is becoming noticeably more efficient.
Following the first delivery in 2023, the tax authorities in North Rhine-Westphalia (NRW) again received structured user data from a German-based crypto platform in September 2025. These data sets contain information on account IDs, deposits and withdrawals, and movements between wallets. For the authorities, these are valuable pieces of the puzzle for identifying tax-relevant transactions. This is not an arbitrary search of all crypto accounts, but rather a request for information under the German Tax Code.
German tax rules for private crypto investors
The German tax regime is comparatively friendly for private investors: Anyone who holds crypto assets—whether currencies or other tokenized assets—for more than a year is generally exempt from taxation. There is also an exemption limit of €1,000 for private sales during the year.
Nevertheless, many investors run into trouble – often not out of malicious intent, but due to the underestimated complexity of the transactions. Coins change exchanges, are moved to hardware wallets, tokens are split, swapped, or loaned to protocols. The result: transaction chains that are almost impossible to reconstruct without proper documentation.
Special features of the attack
The attack was highly targetedThe attackers analyzed the victim's wallet structure in detail and tailored the attack precisely to their positions in the Venus Protocol. Evidence suggests that Deepfake videos were used to make fake identities appear credible.
Another feature: Despite using a Hardware wallet The attack was successful. The reason was the manipulation of the frontend, which caused the victim to sign correctly but unknowingly confirm a malicious transaction.
Specialized software for blockchain analysis
The tax authorities' analysis is no longer manual. Specialized software for blockchain analysis and AI-supported data processing clusters wallet movements, recognizes patterns, and links them with the KYC data collected by the platforms. Even peer-to-peer marketplaces, where not every counter-position is obvious, provide sufficient signals to filter out anomalies.
From 2026, new EU reporting requirements for crypto service providers will also standardize cross-border data flows.
Which transactions are interesting?
Tax authorities must weigh costs against benefits. Cases where the transaction volume is significant become particularly interesting. As a rule of thumb, the larger the flows, the higher the likelihood that an audit is worthwhile. Smaller investors aren't automatically off the hook, but realistically have a lower priority.
What is decisive is not just the absolute amount of profit, but often the sum of the movements and their structure: short holding times, frequent trades, transfers between many wallets and exchanges.
Test questions for crypto investors
Every investor should ask themselves the following questions:
- Holding periods: Have I held my crypto for more than a year? Can I document transfers between my wallets without a purchase or sale transaction?
- Prizes: What profits did I make in a calendar year? Losses from another year cannot be offset directly; they must be declared separately.
- Exemption limit: Am I exceeding the exemption limit of €1,000 per calendar year? This limit applies cumulatively, not per individual transaction.
- Completeness: Is it possible to compile a traceable transaction list for each tax year (deposits, withdrawals, purchases, sales, transfers, staking/lending/airdrops, etc.)?
- Plausibility: Does the chronological order make sense—especially for transfers between exchanges and wallets? Is there evidence of inventory, such as bank statements or platform exports?
- Consistency: Do statements, year-end balances, and declared profits/losses match, or are there unexplained gaps?
Transaction costs, splits, or defective exports are particularly critical. These require structured, traceable reports from available sources (exchange exports, wallet explorers, account statements, emails regarding deposits and withdrawals).
What should affected crypto investors do?
In cases of tax evasion, the tax office can make retroactive demands for up to ten years – in practice, this means that in 2025, offenses dating back to 2015 could still be affected.
Normally, the assessment period is four years (five years in the case of careless tax evasion), but in cases of suspected tax evasion, the ten-year period applies. In serious cases, criminal law threatens not only back payments but also severe penalties. Anyone who has not yet correctly declared the affected years should not underestimate the risk but should seek professional help immediately.
In this case, it is advisable to consult an experienced tax advisor and – if there are indications of criminal proceedings – a lawyer specialising in criminal tax law.
