If you're a U.S. citizen holding cryptocurrency on a foreign exchange, you could be in serious trouble - not because you're breaking the law, but because you might not even know you're required to report it. The IRS isn't just watching your bank account anymore. They're tracking your Bitcoin, Ethereum, and other digital assets held overseas. And if you're sitting on more than $50,000 in foreign crypto, you're already behind on your legal obligations.
What Is FATCA, Really?
FATCA, or the Foreign Account Tax Compliance Act, was passed in 2010 to stop Americans from hiding money in offshore accounts. It forces foreign banks and financial institutions to report U.S. account holders to the IRS. If they donât, they face heavy fines. But FATCA doesnât just cover traditional bank accounts. It also covers any financial asset held outside the U.S. - and that includes cryptocurrency.The IRS hasnât officially said, âCrypto on Binance or Kraken counts,â but they donât have to. The law defines âspecified foreign financial assetsâ broadly: any financial account at a foreign institution, or any non-account asset like stocks, bonds, or investments issued by non-U.S. entities. Crypto held on a foreign exchange fits squarely in that definition. If your wallet is on a platform outside the U.S., itâs likely reportable.
When Do You Have to Report?
You only need to file Form 8938 if your total foreign financial assets hit certain thresholds. These numbers matter - and they change depending on where you live and how you file.- If youâre single and living in the U.S., you report if you had more than $50,000 on the last day of the year, or more than $75,000 at any point during the year.
- If youâre married and filing jointly in the U.S., the thresholds are $100,000 (end of year) or $150,000 (any time during the year).
- If youâre married filing separately, you still use the lower $50,000/$75,000 thresholds.
- If you live abroad, the thresholds are higher - $200,000 on the last day or $300,000 at any time for singles, and $400,000/$600,000 for joint filers.
These numbers include all your foreign assets combined - bank accounts, stocks, real estate investments, and crypto. So if you have $30,000 in a Swiss bank and $40,000 in Bitcoin on Binance, youâre over the $50,000 limit. You must file Form 8938.
Is Crypto Really Covered Under FATCA?
This is where people get confused. Some say, âCrypto isnât money, itâs property.â Others argue, âItâs not a bank account, so it doesnât count.â But the IRS doesnât care about labels. They care about control and location.If youâre using a foreign exchange like Binance, Kraken, Coinbase Europe, or Bitstamp - all of which are based outside the U.S. - and you have an account there, thatâs a foreign financial account under FATCA. Even if you hold crypto in a non-custodial wallet (like MetaMask) but the wallet is linked to a foreign exchange or service that holds your private keys, you could still be caught.
Foreign exchanges themselves are required to register with the IRS under FATCA. The IRS publishes a public list of registered institutions. If your exchange is on that list, theyâre already reporting your name, address, account number (or login), and balance to the IRS. That means they already know youâre there. The question isnât whether they know - itâs whether youâve told the IRS yourself.
FATCA Isnât the Only Form You Might Need
Donât forget about FBAR - FinCEN Form 114. This is separate from FATCA. FBAR kicks in if you have more than $10,000 in foreign financial accounts at any time during the year. Traditionally, crypto wasnât included. But thatâs changing fast.In 2024, FinCEN proposed new rules to explicitly include cryptocurrency accounts under FBAR. If those rules become final - and they likely will - youâll need to file both Form 8938 and FBAR if you meet both thresholds. Thatâs double reporting. And the penalties for missing FBAR? Up to $10,000 per violation, and up to $100,000 or 50% of the account balance if itâs willful.
So if you have $15,000 in Ethereum on Kraken (a foreign platform), youâre already over the FBAR threshold. You need to file Form 114. And if your total foreign assets (including crypto, bank accounts, etc.) exceed $50,000, you also need Form 8938.
How Do You Report Crypto on Form 8938?
Thereâs no specific line for âBitcoinâ or âEthereum.â You report it under âOther Financial Assets.â Youâll need to list:- The name of the foreign platform (e.g., Binance, Kraken)
- Your account ID or login email
- The highest value of your crypto during the year (in USD)
- The value on the last day of the year
- A note saying âCryptocurrency held on foreign exchangeâ
If the exchange doesnât give you an account number - which most donât - just write âUnknownâ or âLogin: [email protected].â The IRS accepts this. Theyâve said so in guidance documents.
Valuation is tricky. Crypto prices swing wildly. The IRS doesnât require daily tracking, but you must use a reasonable method. Most tax pros recommend using the highest price during the year for the âmaximum valueâ and the price on December 31 for the year-end value. Use data from reputable sources like CoinMarketCap or CoinGecko - not random exchanges.
What About Taxes on Crypto Sales?
Reporting your holdings on Form 8938 doesnât replace your regular crypto tax reporting. Every time you sell, trade, or spend crypto, you trigger a taxable event. You must report capital gains or losses on Form 8949 and summarize them on Schedule D. If you earned crypto from staking, airdrops, or mining, thatâs ordinary income - report it on Form 1040.The IRS uses FIFO (first-in, first-out) by default. That means if you bought Bitcoin in 2020 for $5,000 and sold it in 2025 for $60,000, you owe tax on $55,000 gain - even if you had other BTC bought later at higher prices. You can choose specific identification, but you have to track every single unit. Most people donât.
What Happens If You Donât Report?
The IRS has tools now that didnât exist five years ago. They get data from foreign exchanges. They cross-check bank records. They use blockchain analysis firms. If youâre on a foreign exchange, they know.Penalties for missing Form 8938 start at $10,000. If you donât fix it after being notified, it can go up to $50,000. For FBAR, penalties are even steeper. And if the IRS thinks youâre hiding assets on purpose? You could face criminal charges.
But hereâs the good news: the IRS has amnesty programs. If youâve never reported foreign crypto before, you can file amended returns and catch up without penalties - as long as you do it before they come knocking.
What Should You Do Right Now?
If you hold crypto on any foreign platform, hereâs your checklist:- Find every foreign exchange or wallet service youâve used in the last six years.
- Calculate your highest balance in USD for each year (use CoinGeckoâs historical prices).
- Add up all your foreign assets - crypto, bank accounts, investments.
- If any yearâs total exceeded the thresholds, file Form 8938 for that year.
- If any yearâs foreign crypto balance exceeded $10,000, file FBAR (FinCEN Form 114).
- Review your past tax returns to make sure you reported all crypto sales and income.
Donât wait. The IRS is actively auditing crypto users. Theyâre not just targeting big investors. Theyâre going after people with $15,000 in Binance accounts. If youâre unsure, talk to a tax professional whoâs handled FATCA and crypto cases before. Not just any CPA - one who knows the difference between a custodial and non-custodial wallet, and whoâs filed Form 8938 for crypto.
The Bottom Line
FATCA isnât going away. Crypto isnât going away. The IRS is connecting the dots. What used to be a gray area is now a red flag. If youâre a U.S. citizen holding crypto overseas, youâre not hiding anything - youâre just behind on paperwork. The fix is simple: report it. File the forms. Pay what you owe. And move on.Ignoring it wonât make it disappear. Itâll just make it worse.
Do I need to report crypto on Form 8938 if I only hold it in a non-custodial wallet?
Only if the wallet is linked to a foreign exchange or service that holds your private keys. If you control your own keys and never used a foreign platform to buy, trade, or store your crypto, itâs not a foreign financial account under FATCA. But if you bought your Bitcoin on Binance and transferred it to your own wallet, the account on Binance is still reportable.
What if I donât know the exact value of my crypto from years ago?
Use historical prices from CoinGecko or CoinMarketCap. The IRS accepts these sources. If you canât find exact data, use the highest price during the year and note âestimatedâ on the form. Better to overvalue than undervalue - underreporting triggers penalties.
Does FATCA apply to crypto held on U.S.-based exchanges like Coinbase or Kraken US?
No. FATCA only applies to foreign financial institutions. Coinbase U.S. and Kraken U.S. are U.S.-based and donât trigger FATCA reporting. But if you use Kraken Europe or Binance.com, youâre dealing with a foreign entity - and you must report.
Can I file Form 8938 and FBAR myself, or do I need a tax pro?
You can file both yourself, but if you have multiple foreign platforms, complex transactions, or past unreported crypto, a professional is worth it. FATCA and FBAR are easy to mess up. One mistake can cost you thousands in penalties. Look for a CPA or tax attorney with experience in international crypto compliance.
What if I already sold all my foreign crypto - do I still need to report it?
Yes. You report the asset based on its value during the year you held it. Even if you sold it in January, you still need to report it for the prior year if it met the threshold at any point. The IRS cares about ownership during the tax year, not whether you still hold it.
prashant choudhari
December 26, 2025 AT 08:50FATCA applies to foreign financial assets including crypto on non-US exchanges period
Form 8938 threshold is $50k for single filers in the US
Use CoinGecko historical prices for valuation
FBAR kicks in at $10k separate form
No emoticons no fluff just facts
Willis Shane
December 26, 2025 AT 12:02I appreciate the thorough breakdown of FATCA and FBAR requirements for cryptocurrency holdings, but I must emphasize that non-compliance is not merely a technical oversight-it is a violation of federal tax law with severe civil and potential criminal consequences. The IRS has demonstrated its capacity to cross-reference blockchain analytics with foreign financial institution disclosures, and the notion that one can 'fly under the radar' is dangerously misguided. I urge all U.S. citizens to consult a qualified international tax attorney before filing amended returns, as improper submissions may inadvertently trigger audits or penalties. This is not a suggestion-it is a legal imperative.
Jake West
December 27, 2025 AT 00:26Bro, why are we even doing this? The IRS is just trying to squeeze every dime out of people who actually built wealth instead of working 9-to-5. I mean, I held BTC on Binance for three years and never heard a peep. Now they want me to dig up prices from 2021? Who even remembers what Bitcoin was worth then? And don't get me started on FBAR-like I'm supposed to file two forms for something I didn't even cash out? This whole system is rigged. I'm not paying a CPA $500 to explain how to fill out a form that makes no sense. If they want my crypto, they can come take it.
Shawn Roberts
December 28, 2025 AT 11:43YESSSS this is so important!!! đ
Guys I just filed my 8938 for the first time and it felt like a weight lifted off my chest đ
Don't wait like I did-go check your balances on CoinGecko right now!
Even if you sold everything last year, you still gotta report it for the year you held it!
And yes it's annoying but it's way better than getting a letter from the IRS saying 'we know you had 40k on Kraken' đ
Just do it. You got this. đȘđșđž
Abhisekh Chakraborty
December 28, 2025 AT 22:22I'm in the same boat as you all but I'm so tired of this. I moved to India because I thought I could escape this mess. But now they're chasing me across oceans? I have 60k in crypto on Binance and I haven't touched it in years. I don't even know how to file Form 8938. I tried reading the IRS website but it's like reading ancient Latin. I just want to live my life. Why do they have to make it so hard? I'm not hiding anything. I just want to be left alone. Can someone just tell me what to do without all the jargon? I'm begging you.
dina amanda
December 30, 2025 AT 17:10This is all part of the globalist agenda. The IRS doesn't care about taxes-they care about control. They want to track every single move you make. Crypto was supposed to be free. Now they're forcing you to report it like you're some criminal. Who gave them the right to know what's in your wallet? And why do they care if you use Binance instead of Coinbase? It's all about power. They're scared of decentralization. They know if people can hold crypto without banks, they lose control. This isn't about taxes. This is about tyranny. And if you file these forms, you're helping them. Don't be fooled.
Emily L
December 31, 2025 AT 16:59Okay but what if you just moved your crypto from Binance to your own MetaMask and never touched it again? Do you still have to report it? I mean, I didn't use Binance after 2022 but the IRS says if you ever had an account there it counts? That's insane. I'm not even sure I remember my login. I'm not paying someone $300 to dig up my old email from 2021. This is ridiculous. Why can't they just let people be? I didn't steal anything. I just bought crypto. That's it.