FBAR in crypto: When and how to report foreign accounts

While many major crypto platforms have headquarters in the United States, foreign companies also provide Web3 services to global clients. Americans who use those services have extra work to do when tax season rolls around, as they may need to file a Report of Foreign Bank and Financial Accounts (FBAR).

The rules about FBAR for crypto are still evolving, but there are a few guidelines crypto investors and traders should know. This article will help you understand whether FBAR is relevant to you and how it might affect your crypto taxes.

What’s an FBAR, and why does it matter for crypto traders?

An FBAR is a reporting requirement for U.S. persons who’ve held over $10,000 in one or more foreign financial accounts at any point during the calendar year. This requirement is part of the Bank Secrecy Act (BSA), administered by the Financial Crimes Enforcement Network (FinCEN) and it helps the U.S. government monitor for illicit activities like tax evasion and money laundering.

Do you need to report crypto on an FBAR?

FinCEN’s formal regulations, detailed in 31 CFR § 1010.350, make no mention of crypto assets, which leaves room for interpretation. However, in December 2020, FinCEN released Notice 2020-2, which explicitly mentioned digital assets held in foreign accounts. According to this notice, those digital assets aren’t reportable “at this time,” but FinCEN indicated it intends to add “virtual currency as a type of reportable account” in future amendments to the BSA.

Given the current regulatory uncertainty, the safest strategy is a conservative approach to reporting foreign crypto accounts. U.S. persons with over $10,000 in crypto stored with a foreign financial institution should consider reporting these holdings on an FBAR for complete transparency.

What counts as a foreign financial account?

Centralized financial institutions with foreign headquarters are subject to FinCEN’s reporting requirements. A U.S. company's foreign branch does not make the account foreign for FBAR purposes. This may include:

• Centralized exchanges (CEXs): Foreign CEXs often specialize in trading cryptocurrencies with fiat onramps and offramps. If you file an FBAR, you should list foreign crypto exchanges like Binance International, Bybit, and KuCoin.
• Custodial wallets: Unlike self-custodial wallets, these service providers hold private keys on behalf of their users. Since this means they manage crypto for you, they’re considered financial institutions.
• Crypto interest accounts: Some international companies offer bank-like accounts for cryptocurrencies. If Americans deposit digital assets on these platforms to earn interest or engage in lending, those assets may be subject to FBAR reporting.
• Brokerage or financial advisory platforms: Even if a foreign trading service or financial management firm doesn’t specialize in crypto, it may offer crypto holdings that should be reported on your FBAR.

Crypto assets held on U.S.-based CEXs like Coinbase, Kraken, and Gemini aren't subject to FBAR requirements. Similarly, crypto investors don’t have to file an FBAR for assets held in self-custodial wallets where they control their own private keys (like Trezor or Ledger).

When you should report crypto on an FBAR

There’s still considerable debate over what crypto holdings should go on an FBAR under FinCEN’s current guidance. To be on the safe side, here are a few examples to illustrate when you may and may not need to report crypto assets:

• Do report: Suppose you have $4,000 worth of Tether (USDT) in a Binance International account, and $7,000 worth of Bitcoin (BTC) on the CEX Bitstamp. Since the combined value of these accounts exceeds $10,000, they meet the threshold for filing an FBAR.
• Do report: If your foreign custodial wallet held over $10,000 in Ethereum (ETH) during any point in the past calendar year, you should report that ETH on an FBAR.
• Don’t report: If you transferred above $10,000 worth of ETH from a U.S.-based exchange to a self-custodial wallet, there’s no need to report this in an FBAR.
• Don’t report: Even if you had over $10,000 in your Coinbase account, you don't have to file an FBAR. While Coinbase is a global brand, it has headquarters in the U.S.

FBAR cryptocurrency threshold rules

You only need to consider filing an FBAR if your foreign accounts reach a total value of $10,000 at any point during the calendar year. For foreign accounts that quote crypto prices in a fiat currency other than USD, you’ll use the official Treasury conversion rates to determine the USD values.

Keep in mind that you don’t have to pay additional tax when you disclose these assets – all that’s required is disclosure.

How to file an FBAR for your foreign crypto accounts

The official form for reporting foreign holdings is FinCEN Form 114. Before filing, gather relevant account information and conversion rates for each account's highest value in USD during the calendar year. Then you can submit these details online through FinCEN’s BSA E-Filing System.

Penalties for not reporting crypto on an FBAR

Since the current BSA doesn’t explicitly mention crypto, it’s unclear whether FinCEN or the IRS will enforce penalties for failing to disclose digital assets. However, there are severe penalties for those who hold non-crypto assets with foreign institutions and don’t file an FBAR.

For 2026, violators face a $16,536 penalty for non-willful violations, and either $165,353 or 50% of the foreign account’s value (whichever is higher) for willful violations. These amounts are adjusted annually for inflation. So taxpayers with digital assets in foreign accounts often err on the side of transparency to avoid these penalties.

FBAR versus FATCA for crypto assets

The Foreign Account Tax Compliance Act (FATCA) shares many features with FinCEN’s FBAR requirement. However, FATCA is an IRS requirement with distinct definitions and thresholds for assets in foreign accounts. FATCA covers a broader array of “Specified Foreign Financial Assets,” so it’s more likely crypto investors will meet FATCA’s thresholds with their aggregate holdings.

For example, taxpayers who are unmarried or married filing separately and live in the United States must document foreign assets that have an aggregate total over $75,000 at any time during the year, or $50,000 at year’s end. These taxpayers need to fill out IRS Form 8938 in addition to filing an FBAR.

Record all your crypto transactions with CoinTracker

Although there’s no formal FBAR requirement for foreign crypto holdings, the safest strategy for investors is to compile thorough transfer histories. CoinTracker’s Portfolio Tracker simplifies this task by linking to exchange APIs and public wallet addresses, so you can provide a clear audit trail for tax authorities.

Navigating the crypto world can be challenging, but CoinTracker makes it easy. With automatic tracking of over 50,000 cryptocurrencies and integration with all of the top exchanges, we bring everything into one dashboard. Sign up for free and start your crypto journey with CoinTracker.

Disclaimer: This post is informational only and is not intended as tax advice. For tax advice, please consult a tax professional.

FAQ

Does crypto need to be reported on an FBAR?

FinCEN doesn’t currently require U.S. persons to report crypto on an FBAR, but digital assets may be included in future regulations. Conservative crypto investors may choose to include crypto on their FBARs each year, but only if their total value in foreign accounts exceeds $10,000 at any point during the calendar year.

When does a foreign crypto exchange count as a financial account?

Any account with a financial institution that offers crypto services and has foreign (non-U.S.) headquarters qualifies as a foreign financial account for FBAR reporting purposes.

How do I calculate the FBAR threshold for crypto assets?

You may need to file an FBAR if you held $10,000 or more in aggregate across all foreign financial accounts at any point during the calendar year. If you have assets in accounts that use foreign fiat currencies, you can use the Treasury’s year-end exchange rates to calculate the maximum value in USD.

Do I have to file an FBAR for Coinbase holdings?

If you hold crypto in a Coinbase account, you don’t have to file an FBAR, because Coinbase is a U.S.-based exchange.