Do I need to report foreign crypto exchanges on FBAR?

The FBAR reporting requirement for cryptocurrency held on foreign exchanges is an evolving area of regulation. As of current guidance, FinCEN has signaled its intent to include virtual currency accounts at foreign exchanges within the scope of FBAR, though the final rule has not been formally enacted.

In 2020, FinCEN issued a notice of proposed rulemaking indicating that the Bank Secrecy Act regulations would be amended to include virtual currency as a type of reportable account for FBAR purposes. The comment period has closed and a final rule is expected, but the exact timeline remains uncertain.

Despite the lack of a final rule, the IRS and FinCEN have strongly encouraged taxpayers to report foreign crypto exchange accounts on FBAR. The conservative and recommended approach is to include these accounts in your FBAR filing if the aggregate value of all your foreign financial accounts (including crypto exchange accounts) exceeds $10,000 at any time during the year.

To value cryptocurrency for FBAR purposes, use the fair market value of all digital assets held in the foreign exchange account at its maximum during the year, converted to US dollars. You can use a reputable crypto price aggregator for the conversion.

Accounts on US-based exchanges (such as Coinbase, Kraken US, or Gemini) are domestic accounts and do not need to be reported on FBAR. However, accounts on exchanges headquartered outside the US — such as Binance (global), OKX, Bybit, or foreign-specific platforms — would be considered foreign accounts.

Cryptocurrency held in personal wallets (hardware wallets like Ledger or Trezor, or software wallets) is generally not reportable on FBAR because a personal wallet is not an account at a financial institution.

For Form 8938 (FATCA), the IRS has indicated that virtual currency held in a financial account at a foreign financial institution is a specified foreign financial asset. If your total foreign financial assets (including crypto exchange balances) exceed the applicable threshold, they should be reported.

We recommend conservative compliance — it is far better to over-report than to face penalties for under-reporting.