The Crypto Asset Transparency Act EU (KStTG-E)

The next EU regulatory hammer: The Cryptocurrency Transparency Act EU (KStTG-E). It will come into effect at the end of 2025. You should know about it!

Crypto Asset Transparency Act: Overview and Implications

With the planned implementation of the Crypto Asset Transparency Act (KryptoTransparenzG), Germany is taking a significant step toward expanding financial transparency obligations into the crypto space. The act aims to implement the EU directive DAC8 into national law and to comprehensively regulate the exchange of information on crypto asset holdings across Europe.

“This article does not constitute tax advice. It merely summarizes and comments on publicly available content for informational purposes.”

Background and Objective

The Crypto Asset Transparency Act is intended to close tax information gaps arising from the anonymous and decentralized nature of crypto assets. By introducing reporting obligations for crypto asset service providers, the law aims to enable tax authorities to detect, assess, and combat tax evasion and other financial crimes involving crypto assets more effectively.

Scope and Affected Parties

The law primarily applies to Crypto Asset Service Providers, especially those classified as Reporting Crypto Asset Service Providers (RCASPs). This includes:

• Crypto exchanges
• Wallet providers
• Staking and lending platforms

These providers will be required to report specific user and transaction data to the German Federal Central Tax Office (BZSt), which will then exchange this information with other EU member states.

Reportable Data

The following information must be reported:

• Customer identity (KYC data)
• Types and amounts of crypto assets
• Transaction volumes (purchases, sales, swaps)
• Wallet addresses and custody details

Legal Basis and EU Context

The KryptoTransparenzG is Germany’s implementation of the Directive on Administrative Cooperation 8 (DAC8), which was adopted by the EU in October 2023. DAC8 is part of a broader framework for tax transparency and aligns with international standards such as the OECD Crypto-Asset Reporting Framework (CARF).

Timeline and Implementation

• Draft Law Publication: May 2024
• Planned Adoption: Q3 2024
• Entry into Force: Likely from January 2026
• Reporting Start: From January 2027, covering the 2026 tax year

Compliance and Enforcement

Crypto service providers operating in Germany or offering services to German residents must:

• Register with the BZSt
• Implement reporting systems and customer identification measures
• Submit annual reports in a specified format

Non-compliance may result in fines or license withdrawal.

Implications for Users and Providers

For crypto users, the act means increased transparency and potentially more intensive tax audits. Service providers face technical and legal challenges due to the reporting obligations and must invest in compliance structures and technologies.

However, it is also hoped that the law will create legal clarity and enhance the credibility of the German crypto market by aligning it with international transparency standards.

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