FATCA Cryptocurrency Reporting: What You Need to Know About Crypto and Tax Compliance

When you hold cryptocurrency in an overseas wallet or exchange, FATCA cryptocurrency reporting, a U.S. law requiring foreign financial institutions to report account information of American taxpayers to the IRS. Also known as Foreign Account Tax Compliance Act, it was never designed for crypto—but the IRS now treats digital assets like any other foreign financial asset. If you’re a U.S. person with crypto holdings outside the U.S., FATCA could apply to you—even if you never sold a single coin.

FATCA forces foreign exchanges, custodians, and even DeFi platforms that serve U.S. clients to collect and send data about account holders: names, addresses, account numbers, and balances. This includes platforms based in places like Singapore, Switzerland, or the Cayman Islands. If they don’t comply, they face a 30% withholding tax on U.S.-sourced payments. That’s why most major exchanges now ask you to certify your U.S. status. You might see this as a simple checkbox, but it’s part of a global tax net tightening around crypto.

It’s not just about reporting your holdings. The IRS cross-references FATCA data with Form 8938 (Statement of Specified Foreign Financial Assets) and FinCEN Form 114 (FBAR). Missing one doesn’t mean you’re safe. In 2023, the IRS started matching blockchain analytics with FATCA filings to flag unreported crypto activity. People who thought using a non-U.S. exchange kept them under the radar are now getting letters. Even if you didn’t earn income from crypto, just holding $10,000+ in foreign wallets triggers reporting.

Related entities like IRS crypto reporting, the internal revenue service’s system for tracking digital asset transactions and foreign holdings and offshore crypto accounts, crypto wallets or exchanges located outside the United States that may trigger FATCA and FBAR obligations are now central to tax compliance. You can’t ignore them just because your exchange doesn’t send you a 1099. The IRS doesn’t need one—they get the data directly from abroad.

Some users think using a self-custody wallet avoids FATCA. It doesn’t. If you’re a U.S. taxpayer and your wallet is hosted on a foreign service—like a non-U.S. DeFi protocol or a foreign-based custodian—that’s still reportable. The key is control and location, not the type of wallet. The same applies to staking rewards earned on foreign platforms. You’re not just paying income tax—you’re also reporting the asset’s existence.

There’s no gray area anymore. The U.S. government has spent millions building tools to track crypto across borders. FATCA is one of the most powerful levers they’ve got. And with countries like Canada, Australia, and the UK adopting similar rules, the global net is widening. Ignoring FATCA isn’t a loophole—it’s a red flag.

Below, you’ll find real cases and breakdowns of how FATCA intersects with crypto, from Iranian miners using Bitcoin to bypass sanctions to Taiwanese users navigating licensed platforms under strict reporting rules. You’ll see how people got caught, how they avoided penalties, and what you need to do right now to stay compliant. No theory. No fluff. Just what matters.