Mandatory sales on cryptocurrency exchanges: What is the holding period? and what must be recorded

During these weeks, anyone holding a balance on a trading platform is aware of the notices: a deadline has been set, after which the provider will dispose of the remaining positions themselves. As of August 16, 2026, our statistical overview of deadlines shows that before August 31 alone, seven providers had seven such deadlines. Luno will close its EU accounts on September 1, and sales and euro payments can only take place until August 31, 2026, as we reported on August 9. Valour is conducting a mandatory redemption of a crypto ETP traded on Xetra with a deadline for redemption notice of September 1, 2026, as we reported in our August 18 article. Kraken has announced that it will liquidate the delisted tokens in September; our report on the matter is August 14, 2026.

All of these articles answer the same question: When do you have to take action? But no article fully answers the other question that comes with it, which is more costly. If you miss the deadline and the platform sells, converts or settles your positions on its own, what will happen for tax purposes?

Short answers have appeared as clauses in many of our reports. The longer answer lies in two public documents that together explain which day counts, which exchange rate must be applied, and what records you need if the platform that triggered the sale no longer exists after six months. This article will sort out these two documents. It is no substitute for tax advice, and tax advisers are still the right person to consult for your own situation.

Forced sales, forced clearing, and forced conversions: What the exchange does with your position in each case

These terms are used interchangeably, but behind it are three different processes, and when it comes to taxation, they differ in one point that will become important later.

Compulsory clearing: Platforms sell in euros or stablecoins

This is the most common situation during delisting. Once the withdrawal deadline expires, the provider sells the remaining position in the market and credits the proceeds to the account. Kraken has announced this approach for delisted tokens and pointed out in the same notice that no or little revenue may be generated, as we reported on August 14, 2026.

Forced conversion: one token becomes another

where no euros enter the account; the position is converted to another crypto-asset. Revolut has announced this for USDT, and several migrations to new networks have followed the same pattern. Taxically, the situation is even trickier because there is no inflow of euros to pay taxes.

Compulsory Call: Issuer Repossession of Securities

For exchange-traded products (such as crypto ETP), the process is initiated by the issuer, not the trading platform. Holders will receive cash settlement or, if applied in a timely manner, physical delivery of the underlying crypto assets. This situation follows different tax rules than directly held tokens because ETP is a debt security. The German Federal Ministry of Finance (BMF) notice treats debt securities separately and refers to Article 20 of the German Income Tax Act based on their structure. The rest of this article will discuss the first two scenarios, namely crypto-assets held directly in private assets.

Disposition under Article 23 of the Income Tax Act: Why a forced sale is the same as what you trigger yourself

According to the jurisprudence of the German Federal Financial Court, cryptographic assets are other assets within the meaning of Article 23, paragraph 1, sentence 1, item 2, of the German Income Tax Act. The German Federal Ministry of Finance adopted this classification in its notice of March 6, 2025, and explicitly cited the judgment of the German Federal Fiscal Court of February 14, 2023 (case No. IX R 3/22). Gains from the sale of such assets are subject to tax if the period from purchase to disposal does not exceed one year.

What is decisive for our question is how the notice defines the word "disposal". Paragraph 54 states that, as a mirror image of an acquisition, the transfer of assets acquired for payment to a third party constitutes a disposal. Converting crypto-assets into legal tender, goods, services or other crypto-assets also constitutes disposal.

The whole issue depends on this definition, so it needs to be clarified here: the notice does not explicitly mention forced sales anywhere. It targets transactions, i.e. paid transfers, and imposes no conditions on who triggers the transaction. According to our understanding, compulsory liquidation and compulsory conversion are the same as the sale order you issue yourself, and are subject to the same regulations. Anyone who needs to make this classification legally sound should confirm it with a tax adviser before using it as a basis for tax returns.

In practice, this means that voluntariness is not a feature that can be relied on. The fact that you have not chosen the timing does not appear in Section 23 of the Income Tax Act, nor does it appear as an exception in the notice. We have explained separately how the one-year holding period for crypto assets works under normal circumstances; mandatory circumstances do not change the mechanism, but just deprive you of control over the timing of the trigger.

In forced monetization, the trading platform sets the rhythm: the moment recorded therein is the key.

One-year holding period in mandatory clearing: Why the timestamps recorded by trading platforms determine everything

This is where most accounts stop processing, and where the issues of affected people start to become interesting. If the exchange sells within a window of several days, you initially don't know on which day your position was processed. However, this precisely determines whether the one-year deadline is exceeded.

Paragraph 55 of the notice gives the answer: To determine the one-year period, if the acquisition or disposal is made through a centralized trading platform, it relies on the moment recorded by the platform. Therefore, the decisive factor is the timestamp the trading platform keeps in its own records, not the day you notice the entry in your account.

This has two consequences. First, you can't change the date afterwards, even through subsequent payments. Secondly, you must obtain the timestamp while the account is still open. An account statement or transaction overview showing the date and time of sale is important evidence.

In the same paragraph, the notice also allows the second avenue: If the basic obligation of contract law determines whether the one-year period has exceeded, the taxpayer must prove the moment of contract signing through appropriate records. For forced liquidation, it's a difficult path because you don't have any contracts to show. The feasible way is through the platform's records.

So if you face an upcoming deadline, the order is clear: first check whether your position is still within a one-year period, and then decide whether to sell or withdraw early yourself. Which dates are currently running, we have summarized them in our exchange deadline overview.

Clearing window lasting several days: How this notice allows valuation using daily exchange rates

Timestamps solve the deadline problem. But it has not yet resolved the exchange rate issue. For forced conversions to another crypto asset, there is no euro amount from which to read the benefits; while for clearing spread over several days windows, the exchange rates on the first and last day can differ significantly.

Paragraph 58 of the notice stipulates that when a cryptographic asset is exchanged for other cryptographic assets, the market exchange rate of the cryptographic asset received at the time of conversion shall be used as the proceeds of disposal. If the market exchange rate of the assets received cannot be determined, the same paragraph does not object to using the market exchange rate of the abandoned crypto asset.

If the exact time is missing, paragraph 91 provides further assistance. If market exchange rates are not valued at the time of acquisition or exchange transactions, but are based on daily exchange rates determined by recorded parameters, tax authorities may temporarily recognize these as a tax basis as long as the consistency of the valuation is ensured. The daily average exchange rate, daily spot exchange rate and daily closing exchange rate all meet the conditions of the daily exchange rate.

The condition of consistency is more important than it sounds. The notice clearly lists a counterexample: if the acquisition cost uses the exchange rate source with the highest market exchange rate, and the disposal proceeds use the source with the lowest market exchange rate. Anyone who uses different sources for purchase and forced sales will lose recognition of both numbers. If you use tax reports from multiple providers, each report should be evaluated separately in accordance with paragraph 91.

The 1000 euro tax exemption threshold, FIFO and income-related fees: How to calculate the proceeds of forced sales

According to Article 23, paragraph 3, sentence 1, of the Income Tax Law, the proceeds are equal to the disposal price less acquisition costs and income-related expenses. Paragraph 59 of the notice clearly states that transaction costs associated with disposal should be considered as income-related expenses. Fees retained by the platform to realize or pay benefits will reduce taxable benefits as long as there is evidence.

According to Article 23, paragraph 3, sentence 5, of the Income Tax Act, if the taxpayer's total proceeds from all private disposal transactions within a calendar year are less than 1000 euros, the transaction remains exempt from taxation. As of the 2023 evaluation period, this figure is 600 euros. This is a tax exemption threshold, not a tax exemption: once the threshold is reached, all proceeds are subject to tax, not just the excess.

Regarding which units are counted as sold, paragraph 61 applies the principle of individual evaluation first. If an individual assessment is not possible, then for holding period purposes, the crypto assets with the same transaction identification that should be considered to be purchased first will be disposed of. The notice here clearly adopts a wallet-based perspective, and once a method is selected, the method should be maintained in the wallet until the position is fully disposed of. Therefore, people who buy across multiple accounts and wallets cannot calculate the result of a forced sale through a general calculation of the overall position.

Pursuant to paragraph 63, an extension of the disposal period for currency and payment tokens to ten years does not apply. Concerns that people occasionally read about pledging or borrowing would extend the term of these tokens to ten years were resolved.

Once a platform is closed, there is often little evidence left to leave. According to the notice, taxpayers bear the consequences.

Losses from forced sales: Why Section 23 (3) of the Income Tax Act restricts offsets

In the case of delisting, the more common outcome is a loss. A token that is no longer listed on any major exchange is usually sold in forced monetization at a price well below the purchase price. The losses are real, and many affected people expect to be able to offset them with gains from other investments.

But this can only be achieved to a certain extent. According to Article 23, paragraph 3, sentence 7, of the Income Tax Act, losses can only be set off to the amount of income earned by the taxpayer from private disposal transactions during the same calendar year; excluded as a general loss deduction, deductions are made in accordance with Article 10d of the Income Tax Act. The eighth sentence of the clause allows losses to be carried forward to the previous and subsequent evaluation periods, but again only for income from private disposal transactions.

Therefore, losses caused by forced liquidation cannot be offset against employment income or investment income in securities accounts. It is limited to its own scope. Anyone who realizes one-year crypto gains in the same year can be offset here; those who have no gains will carry them forward.

The provisions of paragraph 57 on evidence also apply to loss situations: Income-related expenses should be allocated between taxable and tax-exempt private disposal transactions. Transactions that occur outside the one-year period are tax-exempt. Therefore, a forced sale after holding for more than one year will generate neither taxable gains nor usable losses.

Extended cooperation obligations under Article 90 of the Fiscal Code: What additional applies to peripheral trading platforms

Almost all providers currently operating with a deadline are located outside Germany. There is a consequence of this that is almost never mentioned in delisting reports.

Paragraph 89 of the notice states that if crypto assets are acquired or disposed of through a centralized trading platform operated by a foreign operator, taxpayers have extended obligations to cooperate under Article 90 (2) of the Fiscal Code. In addition to disclosing important facts, in these circumstances, you must find out the situation yourself and obtain the necessary evidence. According to the same paragraph, this includes, inter alia, regular and complete retrieval of transaction overviews from centralized trading platforms.

The word "regular" does not appear by accident. It describes ongoing obligations rather than tasks that can be deferred until tax return time. For platforms that are due to close in a few weeks, the two overlap.

The sentence, also located in paragraph 89, may have caused the most damage in the entire issue, writes: Missing records and loss of data, such as due to trading platform bankruptcy or hacking, is borne by taxpayers.

This makes the position clear in the event of closure. When the exchange stops operating and account history can no longer be retrieved, the risk is not borne by the provider or the tax bureau, but by you. Paragraph 87 is based on the fact that on centralized platforms, individual transactions are usually not recorded on the blockchain, but only transactions recorded on the platform in user accounts, and that this information is also within the scope of taxpayers 'responsibility.

If the tax authority is unable to determine the tax basis as a result, it will make an estimate in accordance with Article 162 of the Fiscal Code. Paragraph 92 records two points that have dual meanings: the goal of estimates is to get as close to the actual situation as possible, and estimates must not be used to punish taxpayers. If only individual details are missing, additional records submitted should be evaluated as part of the estimate. Therefore, people with partial evidence should submit rather than waiting for a uniform number.

In practice, this means that the transaction history should be exported before, rather than after, the balance is withdrawn. Once the account is closed, there is no second chance.

Documents before deadline: What details are required by the notification for each disposal

Paragraph 102 describes what the list must achieve: The evidence should ensure that each private disposal transaction is individually traceable and must at least show the common name or code of the token and the number of crypto assets involved, the proceeds (indicating the acquisition cost and disposal proceeds), or the times of purchase and sale and the respective exchange rates, and the holding period.

Paragraph 103 is more specific and lists additional information that tax authorities may require. For mandatory cases, four items in this list are key:

• Acquisition moment, acquisition number, acquisition transaction type, and trading platform used.
• Acquisition costs, incidental acquisition costs (such as transaction fees and other euro costs), and if the acquisition is not made in euros, market exchange rates and their sources.
• Disposal time, disposal quantity, disposal transaction type and trading platform used.
• Disposal gains and disposal costs (in euros), and if settlements are not in euros, market exchange rates and their sources.
• Files in the order of use selected, i.e., the method described in paragraph 61.

According to paragraph 101, tax authorities may also request screenshots of wallets or centralized trading platform accounts in order to verify individual details after exhausting their own investigative methods. Therefore, for a provider that is about to close, a screenshot of the account balance on the last day is more valuable than subsequent attempts to explain it.

Paragraph 90 finally describes when tax reports are considered credible. It must be self-consistent and must not show any signs of incompleteness, such as a clear lack of individual acquisition costs, wallets or trading platforms. Excerpts of reporting settings are also often required, namely the exchange rates and cost flow methods used. Anyone looking for such tools can find common providers in our crypto tax software versus portfolio trackers; it's important that the tool output settings, not just totals.

Our own statistics: Ten articles on deadline say what tax consequences, and none of them say anything

Cryptoticker.io compiled this analysis on August 18, 2026. Method: We searched for German articles published by ourselves since August 1, 2026, with slugs pointing to specific deadlines for specific providers, and programmatically searched for keywords in their bodies. A total of ten articles were checked.

The results are divided into two parts. The basic statements are well covered: eight out of eleven articles mentioned Article 23 of the Income Tax Law, and seven mentioned the 1000 euro tax exemption threshold. The fact that forced sales are tax sales even appear in separate subtitles in seven of the eleven articles.

In contrast, specific implementation details are completely missing. None of the eleven articles mentioned that the moment recorded by the trading platform determines the one-year deadline. There is no mention of extended cooperation obligations under Article 90 (2) of the Fiscal Code on peripheral platforms. No article mentions that realization expenses can be deducted as income-related expenses. The notice itself appeared in only one of eleven articles, and the loss set-off limit appeared in only one.

The goals that this statistic fails to achieve should also be explained: it measures the frequency with which keywords appear in the text, not the substantive quality of paragraphs. An article that may substantively explain the problem but does not cite references will be considered an omission in this statistic. In addition, only our own articles are covered; this statistic does not account for reports from other publishers. Therefore, those affected should not rely on the integrity of news reports, but should read the paragraph numbers mentioned in this article and consult them in the original text. The notice is publicly available from the German Federal Ministry of Finance.

Forced sales and taxes: Points you need to keep in mind

Draw the transaction history before withdrawing the balance.
Transaction overview, account statements and screenshots of positions should be saved while the account is still open; in accordance with paragraph 89 of the notice, subsequent data losses are at your risk. A tool that also outputs report settings can be found in our crypto tax software versus portfolio tracker comparison.

Check the holding period before each upcoming deadline.
If the purchase takes less than a year, the time of sale recorded by the trading platform determines the tax liability, but you no longer determine this time in forced liquidation. Anyone planning to switch platforms should check the terms beforehand, for example in a regulated cryptocurrency exchange comparison.

Consider whether positions must be placed on the platform.
Anyone holding assets on their own will not be forced to sell by any provider's deadline; however, the documentation obligation remains unchanged. Common devices are listed in Cryptographic Hardware Wallet Comparison.

(As of August 18, 2026. This article does not constitute investment advice. Price and fee structures are subject to change; please check terms with your provider before purchasing.)