When you hold cryptocurrency on a foreign exchange, FATCA cryptocurrency, a U.S. law requiring foreign financial institutions to report accounts held by American citizens to the IRS. Also known as the Foreign Account Tax Compliance Act, it doesn’t just target bank accounts—it includes crypto exchanges, wallets, and staking platforms outside the U.S. If you’re a U.S. person with crypto on Binance, Kraken (outside the U.S.), or any non-U.S. platform, FATCA applies to you—even if you never sold a single coin.
FATCA forces foreign platforms to collect your name, address, taxpayer ID, and account balance. If they don’t comply, they face a 30% withholding tax on U.S.-source payments. That’s why most major non-U.S. exchanges now ask U.S. users for their SSN or ITIN. It’s not about spying—it’s about closing the gap. The IRS now cross-references crypto transaction data from U.S. exchanges like Coinbase with FATCA reports from overseas. Missing one? That’s a red flag. And unlike in the early days of crypto, the IRS now has tools to trace wallet activity across chains and platforms.
Related entities like IRS crypto reporting, the agency’s mandatory disclosure rules for digital assets and foreign crypto accounts, any crypto holdings held on non-U.S. platforms are directly tied to FATCA. If you have over $10,000 in foreign crypto accounts at any point during the year, you must file FinCEN Form 114 (FBAR)—separate from your tax return. Many people think FATCA covers everything, but it doesn’t. FBAR does. And failing to file either can mean penalties up to $10,000 per violation, or even higher if the IRS decides it was willful.
Platforms like Binance US and Coinbase follow U.S. rules and report directly to the IRS. But if you used Binance.com, KuCoin, or Bybit while living in the U.S., those platforms are required under FATCA to report your activity—even if they don’t know you’re American. That’s why so many users get flagged: they used a foreign site, didn’t declare it, and the IRS found the match. This isn’t hypothetical. In 2024, the DOJ prosecuted over 120 crypto tax evasion cases, many tied to unreported foreign exchange activity.
What does this mean for you? If you’re a U.S. citizen or resident with crypto on any non-U.S. platform, you’re already under FATCA’s radar. You don’t need to be rich. You don’t need to be trading. Just holding is enough to trigger reporting obligations. The good news? Compliance is simple: report your foreign accounts, include crypto gains on Form 8949, and keep records of all transactions. The bad news? Ignoring it is a one-way ticket to audits, fines, and sometimes jail.
Below, you’ll find real reviews and case studies from traders who’ve been caught in the crosshairs of FATCA, IRS audits, and foreign exchange reporting. Some learned the hard way. Others got ahead by acting early. Whether you’re holding Bitcoin on a foreign wallet or thinking about moving assets overseas, this collection gives you the facts—no fluff, no fearmongering, just what you need to stay legal and avoid penalties.
US citizens holding cryptocurrency on foreign exchanges must report these assets under FATCA. Learn the thresholds, how to value crypto, penalties for non-compliance, and what’s changing in 2025 with new FBAR rules.