DAC8 Is Live: What Expats in Germany Must Do Now to Protect Their Crypto
DAC8 is live in Germany. Expats holding crypto face account freezes if exchange data isn't verified. Learn what to do before the July 2026 deadline.
WonderFunds Team8 min read
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Most expat finance guides in Germany cover the usual suspects: Steuererklärung deadlines, Anmeldung paperwork, maybe a note about foreign bank account reporting. Crypto? It gets a footnote, if that. And that's a problem, because a set of EU-wide rules called DAC8 went into effect on January 1, 2026, and they changed the game for anyone holding digital assets while living in Germany.
If you're an expat with crypto on any exchange, the compliance clock is already ticking. Not for a tax return due next spring. For account verification happening right now.
DAC8: What Actually Changed on January 1
Germany's upper house of parliament (the Bundesrat) approved the Cryptocurrency Tax Transparency Act on December 19, 2025, transposing the EU's DAC8 directive into German domestic law. Every EU member state had to implement the main rules by December 31, 2025. So this isn't a "coming soon" situation. It's live.
DAC8 builds on an OECD framework called CARF (Crypto-Asset Reporting Framework) and requires crypto exchanges and certain wallet providers to collect detailed information about their users and automatically report it to national tax authorities. We're talking names, addresses, dates of birth, tax identification numbers, transaction amounts, market values at time of trade, and current asset balances. All of it, transmitted to authorities starting in 2027 for the 2026 tax year.
Previous EU reporting directives (like DAC7, which targeted platform sellers on eBay, Etsy, and similar marketplaces) didn't really touch crypto. DAC8 does, and it's broad. It doesn't just cover buying and selling; it covers transfers, holdings, and any transaction that passes through a reporting crypto-asset service provider.
Why Expats Get Hit Harder
Here's the part most people miss: DAC8's scope is extraterritorial. If you're classified as a German tax resident, exchanges outside the EU are still expected to report your activity to German authorities. That means your Coinbase account in the US, your Bybit account, your old Binance holdings from before you moved to Berlin, all of it falls under the reporting umbrella if the exchange determines you're an EU resident.
For expats, this creates a specific and underappreciated risk: if your account information doesn't match your actual situation, things can go sideways fast.
Crypto exchanges operating in or serving the EU must begin collecting reportable user data from January 1, 2026, with first automatic reports to tax authorities due between January 1 and September 30, 2027.
The Verification Blind Spot
Think about how many times you've moved since opening your first crypto exchange account. Maybe you signed up on Kraken while living in London, moved to Munich, updated your passport but not your exchange address. Or you registered with a German exchange using your old WG address in Kreuzberg, but you've since moved to Schwabing.
Exchanges now need to verify whether you're an EU resident and, if so, which country's tax authority should receive your data. That means KYC (Know Your Customer) checks are getting more aggressive. Not just identity verification, but tax residency confirmation.
If your account data can't be verified, because your address is outdated, your tax ID is missing, or your identity documents have expired, the exchange has a compliance problem. And their solution to that compliance problem is simple: flag or suspend your account until you fix it.
This isn't hypothetical. BaFin-regulated German firms already implement account verification holds as standard risk mitigation. During the transition period through July 2026, non-compliant accounts may effectively be quarantined.
Frozen funds. Not because you did anything wrong, but because your paperwork didn't keep up with your life.
If you're a German resident sending €60,000 to an overseas exchange to buy Bitcoin, or receiving a large payout from a foreign crypto sale, that's a reportable event, separate from your tax obligations. Most expats don't even know this rule exists. The Bundesbank reporting and the DAC8 exchange reporting are two different systems, and both apply.
Honestly, this part is boring but important. Missing a Bundesbank report isn't the same as missing a Steuererklärung deadline, but it can trigger questions you'd rather not answer during a period when authorities are already receiving your crypto transaction data through other channels.
What Tax Authorities Will Do With This Data
The information flowing from exchanges to the BZSt starting in 2027 won't just sit in a database. Tax authorities can draw conclusions about past crypto activity from 2026 reports. If you had an active exchange account in 2026, the Finanzamt may reasonably conclude you were also trading in 2024 and 2025. That opens the door to retroactive information requests, voluntary disclosure programs, or in serious cases, criminal tax proceedings.
For expats who arrived in Germany mid-stream (say, moved from the Netherlands in 2023 and brought unreported crypto gains along), this is particularly tricky. Your German Finanzamt now has a data trail that starts in 2026 but implies activity going back years. And because DAC8 enables enforcement cooperation between EU member states, your Dutch tax history can intersect with your German one in ways that weren't practically possible before.
Tip
If you moved to Germany from another EU country and held crypto before arriving, gather your complete transaction records from 2024 and 2025 now. Don't wait for a Finanzamt inquiry. Having clean documentation ready before the first DAC8 reports land in 2027 puts you in a much stronger position.
So withdrawing a large amount to a personal wallet doesn't make you invisible. It may actually draw more attention, not less. And if you later want to convert back to EUR through a German exchange, you'll need to explain where those assets came from.
Your Actual To-Do List (Starting Today)
Update every exchange account. Log into each exchange where you hold assets or have an account. Verify that your registered address matches your current German Meldeadresse. Add your German Steuer-ID if it's missing. Make sure your identity documents haven't expired.
Clarify your tax residency. If you're living in Germany but still hold residency status somewhere else, sort this out with your local Finanzamt before 2027. Ambiguous residency is exactly the kind of situation that triggers enhanced review. A simple written inquiry to the Finanzamt can resolve this.
Pull transaction records for 2024 and 2025. Most exchanges let you export CSV files. Do it now, while you still have full account access. If an account gets flagged during the verification phase, you might lose access to your own transaction history temporarily.
Review transfers involving unhosted wallets. If you've moved significant amounts to hardware wallets in the past two years, document the transactions and their purpose. You may need this if the exchange or the Finanzamt asks questions.
Check for cross-border payment obligations. Any single transaction above €50,000 between you and a non-resident entity (including overseas exchanges) likely requires a Bundesbank report. If you've missed one, talk to a Steuerberater about how to correct it.
A Genuinely Messy Situation
None of this is clean or simple. DAC8 sits at the intersection of German tax law, EU-wide enforcement cooperation, and crypto platform compliance, and the rules are still being interpreted in real time. Exchanges are figuring out their reporting systems. Finanzämter are building out their data processing capabilities. And expats are caught in the middle, expected to comply with obligations that most mainstream financial guides don't even mention.
The window for getting ahead of this is roughly the first half of 2026, while exchanges are still in their compliance ramp-up period. By mid-2027, your data will already be in the hands of the BZSt. What happens next depends on whether that data tells a coherent story or raises more questions than it answers.
One thing we're fairly confident about: waiting to see what happens is the worst strategy here.
