Forced Crypto Sales: Tax Risks and Documentation Deadlines

Seven crypto exchanges have set deadlines for forced sales or conversions in the remaining weeks of August and September 2026, according to a review by cryptoticker.io. Luno closes its EU accounts on September 1, with sales and euro payouts possible only until August 31. Valour has initiated a compulsory redemption of a crypto ETP traded on Xetra, with the last redemption notice date September 1. Kraken announced a liquidation window for delisted tokens in September.

For German investors, the tax treatment of these forced sales depends on a single date: the timestamp the exchange records for the transaction. The Federal Ministry of Finance circular of March 6, 2025, which adopts the Federal Fiscal Court's classification of crypto assets as "other assets" under Section 23 of the Income Tax Act, states that the moments recorded by the trading platform govern the one-year holding period. If the exchange sells the holding before the one-year mark, the gain is taxable. If the sale occurs after, it is tax-free.

The circular does not mention forced sales explicitly. It attaches the disposal definition to the transfer for consideration, not to who triggered it. A forced liquidation therefore falls under the same provision as a voluntary sale, tax experts note. The one-year period runs from the exchange's timestamp, not from the day the investor notices the entry in their account.

Documentation is critical. The circular requires taxpayers to obtain the transaction overviews from the trading platform. For foreign-based platforms, which include most of those with current deadlines, Section 90(2) of the Fiscal Code imposes an extended duty to cooperate. The taxpayer must establish the circumstances and obtain the necessary evidence themselves. Missing records, for example because the platform becomes insolvent or shuts down, are borne by the taxpayer, the circular states.