Cryptocurrency held in foreign exchanges or wallets may be subject to additional reporting requirements.
While crypto itself is not considered a foreign financial account under current FinCEN guidelines, this could change in the future. If your account is custodial and involves fiat currency, it might fall under FBAR (Foreign Bank Account Report) or FATCA (Foreign Account Tax Compliance Act) rules.
Even if these rules don’t apply yet, you are still responsible for reporting all income from crypto transactions regardless of where your wallet is located. The IRS focuses on whether you have taxable events, not where the wallet resides.
To stay ahead of compliance changes, keep thorough records of your foreign crypto accounts and monitor IRS guidance. Consulting with a tax advisor experienced in international crypto regulations can help ensure full compliance.
