FATCA and Cryptocurrency Reporting for US Citizens: What You Need to Know in 2026

If you're a U.S. citizen holding cryptocurrency on a foreign exchange, you might be missing a critical tax obligation - and the IRS is watching. FATCA, the Foreign Account Tax Compliance Act, doesn’t just apply to bank accounts in Switzerland or brokerage accounts in Singapore. It now reaches into your digital wallet, even if you think your Bitcoin or Ethereum is "just crypto" and not a financial account. The rules are confusing, the penalties are steep, and the IRS isn’t waiting for you to figure it out.

What FATCA Actually Covers

FATCA was passed in 2010 to stop Americans from hiding money overseas. It forces foreign banks, investment firms, and other financial institutions to report account details of U.S. citizens to the IRS. If you have financial assets abroad worth more than a certain amount, you must report them yourself on Form 8938 - attached to your annual tax return.

The key word here is "financial assets." The IRS defines this broadly: it includes bank accounts, stocks, bonds, and any financial instrument issued by a non-U.S. person. That’s where cryptocurrency gets tricky. There’s no official IRS memo saying "Bitcoin on Binance counts," but tax lawyers and CPAs agree: if your crypto is held on a foreign platform, it likely qualifies.

Why? Because platforms like Kraken, Bitstamp, or Coinbase Europe act as financial intermediaries. They hold your assets, manage your trades, and provide account access - just like a bank. That makes them Foreign Financial Institutions (FFIs) under FATCA. And if they’re registered with the IRS (and most major ones are), they’re required to report your holdings. But that doesn’t mean you’re off the hook. You still have to report them yourself.

When Do You Need to File Form 8938?

The reporting thresholds depend on your filing status and where you live. Here’s what matters in 2026:

• Single filers living in the U.S.: You must file Form 8938 if your foreign assets were worth more than $50,000 on the last day of the year, or more than $75,000 at any point during the year.
• Married filing jointly, living in the U.S.: Thresholds are $100,000 (year-end) or $150,000 (any time during the year).
• Married filing separately, living in the U.S.: Same as single filers - $50,000/$75,000.
• U.S. citizens living abroad: Higher thresholds apply - $200,000 on the last day of the year or $300,000 at any time during the year for single filers.

These numbers include the total value of all your foreign financial assets - not just crypto. So if you have $30,000 in a Swiss bank account and $45,000 in Ethereum on Binance, you’re over the $75,000 threshold. You need to file.

Cryptocurrency Is Treated as Property - But FATCA Doesn’t Care

The IRS treats crypto as property for tax purposes. That means every trade, swap, or sale triggers capital gains reporting on Form 8949 and Schedule D. But FATCA doesn’t care about gains or losses. It only cares about ownership and location.

If your crypto is stored on a foreign platform - even if it’s just a wallet tied to a foreign exchange - it’s considered a specified foreign financial asset under FATCA. That includes:

• Bitcoin held on Binance (Singapore-based)
• Ethereum stored on Kraken (San Francisco-based, but registered under EU FATCA rules)
• Staked tokens in a DeFi protocol operated by a foreign entity
• Crypto held in a foreign trust or LLC

You don’t need to know the exact technical setup. If the platform isn’t based in the U.S. and you can access your crypto through a login, it’s likely reportable. And if you’ve ever sent crypto from a U.S. exchange to a foreign one - even once - you might have crossed into reporting territory.

What If the Exchange Doesn’t Give You an Account Number?

This is a common question. Traditional banks give you account numbers, routing numbers, and physical addresses. Crypto platforms don’t. So how do you fill out Form 8938?

The IRS says: use what you have. You can list:

• The name of the foreign exchange (e.g., "Binance Global")
• The country where it’s headquartered (e.g., "Malta")
• Your account ID or username
• "Unknown" for address if no physical location is provided

You’re not required to guess the exact legal entity behind the platform. Just be clear about what you’re reporting. Many taxpayers list their login email as the "account identifier." The IRS accepts this. What they don’t accept is silence.

FBAR Is Coming for Crypto Too

FATCA isn’t the only rule. There’s also FBAR - the Foreign Bank and Financial Account Report (FinCEN Form 114). For years, crypto wasn’t included. But in 2024, FinCEN proposed new rules to explicitly include digital assets held in foreign accounts.

If these rules are finalized (and they likely will be by mid-2026), you’ll need to file FBAR if your foreign crypto holdings exceed $10,000 at any time during the year - regardless of whether you file Form 8938.

That means two forms for the same assets:

• Form 8938: Filed with your tax return. Thresholds are higher ($50K+).
• FinCEN Form 114 (FBAR): Filed separately with FinCEN. Threshold is $10,000.

Filing one doesn’t replace the other. And the penalties for missing FBAR are brutal - up to $10,000 per violation, or 50% of the account balance if willful.

How to Value Your Crypto for Reporting

Valuing crypto on Form 8938 is messy. Prices swing 20% in a day. Which price do you use?

The IRS doesn’t give exact guidance, but the accepted practice is to use the highest value your asset reached during the year. Why? Because FATCA looks at "maximum value at any time during the year." If your Bitcoin hit $72,000 in March and dropped to $45,000 by December, you report $72,000.

Use a reliable source: CoinMarketCap, CoinGecko, or a major exchange like Coinbase. Don’t use obscure platforms. Keep a screenshot or log showing the date and price. If you’re audited, this is your proof.

What Happens If You Don’t Report?

The IRS has been scanning blockchain data since 2020. They’ve partnered with Chainalysis, Elliptic, and other forensic firms. They know who sent crypto to foreign exchanges. They know when those wallets haven’t filed.

Penalties for failing to file Form 8938:

• $10,000 for each failure to file
• Up to $50,000 if you don’t file after being notified
• Additional penalties if the IRS proves you acted willfully

Worse, the IRS can freeze your U.S. bank account, delay your refund, or even refer your case to criminal investigation.

What Should You Do Right Now?

If you hold crypto on any foreign platform:

1. Calculate your total foreign crypto value at its highest point in 2025.
2. Add it to any other foreign financial assets (bank accounts, stocks, etc.).
3. If the total exceeds the threshold for your filing status, prepare Form 8938.
4. Check if you also need to file FBAR (if over $10,000).
5. If you’ve never filed before, consider the IRS’s voluntary disclosure program - it reduces penalties dramatically.

Don’t wait for the IRS to find you. Don’t assume "everyone else is doing it." The IRS doesn’t care about what others do. They care about what you did.

When to Get Professional Help

This isn’t a DIY situation if your holdings are over $25,000 or if you’ve traded across multiple foreign platforms. The rules are too complex, and the stakes are too high.

Look for a CPA or tax attorney who specializes in international crypto taxation. They’ll know:

• Which exchanges are classified as FFIs
• How to classify DeFi staking accounts
• How to handle crypto held in foreign trusts or corporations
• How to navigate the overlap between FATCA, FBAR, and Form 8949

A good advisor won’t just file your forms. They’ll help you structure future holdings to reduce risk - like moving some assets to U.S.-based platforms or documenting custody clearly.

The Bottom Line

Cryptocurrency isn’t a loophole. It’s a ledger the IRS can read. FATCA was designed to catch hidden assets - and crypto is now part of that system. Ignoring it doesn’t make it go away. It just makes the penalty bigger.

If you have foreign crypto, report it. Even if you’re unsure. Even if it feels like overkill. The IRS rewards transparency. And in 2026, with new FBAR rules coming, the window for easy fixes is closing fast.