Key Takeaways:
Recent data indicates a significant increase in cryptocurrency tax filings in Finland, which have nearly doubled in the past year. However, only a small segment of digital asset holders are reporting their trades.
In response to this growing concern, authorities are intensifying enforcement measures, including asset seizures and international operations targeting illicit activities.
Notably, the Garantex exchange was shut down after processing an astounding $96 billion that has connections to illegal activities since its inception in 2019.
A report from local media outlet Uutissuomalainen reveals that the number of Finnish taxpayers declaring cryptocurrency trades jumped from 8,200 to 16,000 within a single year.
Despite this increase, the actual number of Finns believed to hold digital assets is estimated to be around 300,000, indicating a significant gap in compliance with tax regulations.
For the previous tax year, reported gains linked to cryptocurrencies hit €230 million, while total losses were noted at €30 million, marking a sharp rise from the combined €50 million reported two years prior.
Finland’s Crypto Boom Outpaces Tax Compliance
The latest figures illustrate a growing interest in cryptocurrency trading; however, they also shed light on the disparity between the number of asset holders and those adhering to tax obligations.
Since May 2019, oversight of Finland’s cryptocurrency sector, including exchanges and wallet providers, has fallen under the jurisdiction of the Financial Supervisory Authority (FIN-FSA).
According to Finnish regulations, all cryptocurrency service providers must register with the authorities and comply with financial laws.
These recent developments suggest that while compliance and enforcement efforts are improving, achieving full transparency remains a challenge.
This January, Finnish authorities conducted a significant operation, seizing approximately $2.68 million worth of luxury watches from the founder of Hex, Richard Schueler, also known as Richard Heart, amid an ongoing tax fraud and assault investigation.
The confiscated items, primarily high-end Rolex watches, were discovered in his residence in Espoo, with authorities tracing their origins through both Finnish and U.S. purchases. Eight of these watches were officially seized, as confirmed by Inspector Harri Saaristola, who is overseeing the case.
In a related international crackdown, the U.S. Justice Department, in collaboration with German and Finnish authorities, successfully dismantled the online operations of Garantex—a cryptocurrency exchange implicated in facilitating money laundering for criminal and terrorist groups.
The exchange, which reportedly handled at least $96 billion in cryptocurrency transactions since 2019, has been taken offline following this enforcement action.
Denmark Considers Taxing Unrealized Crypto Gains
In Denmark, the Tax Law Council has put forward a proposal that seeks to tax unrealized gains and losses on cryptocurrency holdings, with potential implementation aimed for 2026.
Outlined in a comprehensive 93-page report, the suggestion lays the groundwork for a consolidated tax model across all digital assets.
The council assessed three distinct frameworks for taxing cryptocurrencies: capital gains, warehouse taxation, and inventory accounting.
This initiative is part of a wider global trend towards stricter enforcement of tax regulations concerning cryptocurrencies and other financial assets.
Italy is also tightening its regulatory stance, with Vice Economy Minister Maurizio Leo announcing plans to increase the capital gains tax on cryptocurrencies from 26% to 42%, explicitly targeting Bitcoin.
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