French tax authorities are at the center of a significant data security scandal after a former tax agent was found to have accessed confidential databases to target cryptocurrency investors. The agent, identified as Ghalia C., was convicted on June 30, 2025, for complicity in an attack on a prison official and criminal conspiracy. Investigations revealed she had also performed unauthorized searches for the personal data of cryptocurrency holders.
The exposed data is reported to include highly sensitive information such as investors' locations, capital gains from crypto holdings, and potentially even on-chain addresses linked to personal identities. Authorities believe Ghalia C. compiled profiles of potential targets, which included both public figures and private crypto owners. The breach was initially uncovered during a probe into an attack on a prison guard, whose personal data was leaked by the agent.
This incident highlights the growing risks associated with increased government scrutiny of cryptocurrency. French authorities have been stepping up efforts to track crypto assets, with proposals for new laws requiring citizens to disclose holdings exceeding 5,000 EUR in value. Furthermore, France is considering an annual 1% tax on digital assets exceeding 2 million EUR, including those in self-custodial wallets.
The case has raised alarm over the security of centralized databases that tie wallet addresses to personal identities. This trend of surveillance is making crypto owners more vulnerable to targeted physical attacks, phishing, and scams. The breach follows other security incidents, such as a hack of Ledger's payment processor, Global-e, which also exposed crypto investor data.
With the number of crypto holders in Europe doubling between 2022 and 2024, the creation of comprehensive ownership databases by tax authorities presents a persistent privacy and security threat. The investigation into Ghalia C.'s network and possible accomplices is ongoing.
