Crypto FBAR Requirements: What You Need to Know About Reporting Crypto to the IRS

When you hold cryptocurrency on a foreign exchange or wallet, you might be subject to crypto FBAR requirements, a U.S. government rule that forces taxpayers to report foreign financial accounts, including crypto, if they exceed $10,000 at any point during the year. Also known as FinCEN Form 114, this isn’t a tax form—it’s a disclosure requirement that carries serious penalties if ignored. The IRS doesn’t care if you made a profit. They care if you had access to crypto held overseas. That means if you used Binance, Kraken, or any non-U.S. platform—even if you never withdrew funds—you could be on the hook.

Many people think crypto is private or anonymous, but the FinCEN Form 114, a mandatory report filed with the Financial Crimes Enforcement Network, not the IRS. Also known as FBAR, it applies to any foreign financial account, including digital assets doesn’t care about that. The U.S. government tracks foreign accounts because they’re used for money laundering, tax evasion, and hiding wealth. Crypto doesn’t get a pass. In fact, since 2016, the IRS has been explicitly stating that virtual currencies count as reportable assets under FBAR rules. If you had $15,000 worth of Bitcoin on Coinbase (U.S.) and $8,000 on Binance (Singapore), you only report the Binance amount. But if you had $12,000 on Binance alone? You’re filing.

It’s not just exchanges. If you hold crypto in a non-U.S. wallet you control—like a hardware wallet stored abroad or a wallet hosted by a foreign service—you still need to report it. The key is foreign control, not whether you own the private keys. If the platform, server, or service is outside the U.S., and your total holdings there hit $10,000, it’s reportable. The deadline is April 15, with an automatic extension to October 15. No extensions for paying taxes, but you can file FBAR late without penalty if you’re honest and proactive. The penalty for willful non-compliance? Up to $100,000 or 50% of the account balance, whichever is higher. For non-willful? $10,000 per violation.

There’s confusion because the IRS also has a separate tax form—Schedule 1 on Form 1040—that asks if you traded or received crypto. That’s about capital gains. FBAR is about ownership location. You can owe taxes without filing FBAR. You can file FBAR without owing taxes. They’re two different systems. People mix them up. The IRS doesn’t. They cross-check data from foreign exchanges, blockchain analytics, and whistleblower tips. If you’ve ever used a non-U.S. platform and didn’t file, you’re not alone—but you’re not safe either.

What you’ll find below are real-world examples of people who got caught, platforms that trigger FBAR, how to file correctly, and what happens when you ignore it. We’ve pulled from cases where traders lost thousands—not from bad trades, but from paperwork. These aren’t theoretical rules. They’re enforced. And if you hold crypto outside the U.S., you need to know exactly where you stand.