FATCA and Crypto: How U.S. Tax Rules Affect Global Crypto Users

When you hold crypto on a foreign exchange, FATCA, a U.S. law requiring foreign financial institutions to report account holders who are U.S. persons. Also known as the Foreign Account Tax Compliance Act, it doesn’t just target bank accounts—it includes crypto wallets, exchanges, and DeFi platforms that handle U.S. clients. If you’re a U.S. citizen, green card holder, or resident alien, even if you live abroad, FATCA means your crypto activity is being tracked—not by you, but by the platform you use.

FATCA works through foreign financial institutions, entities outside the U.S. that hold financial assets for clients. That includes Binance, Kraken, Bybit, and smaller regional exchanges. If they have U.S. customers, they must collect personal data—name, address, SSN or TIN, account balances, and transaction history—and send it to the IRS. Many platforms now block U.S. users entirely to avoid the burden. Others, like Coinbase, comply fully. But if you’re using an offshore exchange and didn’t declare your crypto holdings, you’re already in violation, even if you never filed a tax return.

This isn’t about tax evasion—it’s about reporting. The IRS doesn’t care if you made $10 or $10 million in crypto gains; what matters is whether you disclosed the accounts. FBAR, the Foreign Bank Account Report required for accounts over $10,000, applies to crypto too. And while FATCA is about institutions reporting you, FBAR is about you reporting your own foreign accounts. Both overlap. Many people think crypto is anonymous or offshore, but FATCA closes that loophole. If your exchange is registered in the EU, Singapore, or Dubai, and you’re a U.S. person, they’re legally required to hand over your data.

Non-U.S. users aren’t safe either. If you’re a Canadian, Australian, or Brazilian trader using a platform that serves Americans, your info might still get flagged if the platform can’t perfectly separate accounts. Some exchanges now ask all users to certify their U.S. status—just in case. The penalty for failing to file FATCA or FBAR? Up to $10,000 per year, per account, and it can go higher if the IRS thinks you’re hiding something. The IRS has been using data from crypto exchanges since 2016, and it’s only getting sharper.

What does this mean for you? If you’re a U.S. taxpayer with crypto on any non-U.S. platform, you need to know: your data is already being sent to Washington. The question isn’t whether you’ll be caught—it’s whether you’ve already been reported. The posts below cover real cases: how people got caught, what exchanges actually report, how to fix past mistakes, and what to do if you’re living overseas but still owe U.S. taxes. You won’t find fluff here—just what happens when tax law meets blockchain.