Form 8938 Crypto: What You Need to Know About Reporting Crypto to the IRS

When you hold Form 8938, a U.S. tax form used to report foreign financial assets to the IRS under FATCA. Also known as Statement of Specified Foreign Financial Assets, it's not just for bank accounts—it now includes crypto held overseas. If you're a U.S. person (citizen, resident, or green card holder) and you keep your cryptocurrency on foreign exchanges, wallets, or platforms outside the U.S., you might be required to file this form. It's not optional if your total foreign assets exceed $50,000 on the last day of the tax year—or $75,000 at any point during the year.

Many people think crypto is private, anonymous, or exempt from reporting because it's not issued by a bank. That’s a dangerous myth. The IRS treats crypto as property, and if it’s stored on a foreign platform like Binance, Kraken (outside U.S. jurisdiction), or a non-U.S. wallet provider, it counts as a specified foreign financial asset. That means if you held $60,000 worth of Bitcoin on a Singapore-based exchange in 2024, you needed to file Form 8938. The same applies to staking rewards earned on foreign DeFi protocols or crypto held in a wallet controlled by a non-U.S. entity. This isn’t about income—it’s about ownership location. And the penalties for missing it? Up to $10,000 per form, with more if you don’t fix it after being notified.

Form 8938 doesn’t replace your regular crypto tax return (Form 1040 Schedule D or Form 8949), but it adds another layer. You still report capital gains and income from trading or staking. But Form 8938 asks: Where did you hold it? The form requires details like the name of the foreign platform, the maximum value of your crypto during the year, and whether you had control over the private keys. If you used a non-U.S. custodial wallet like Ledger Live (if managed by a foreign company) or a foreign exchange that holds your keys, you’re likely in scope. Even if you didn’t sell anything, just holding above the threshold triggers the requirement.

Some crypto holders think they’re safe because they use a self-custody wallet like MetaMask. But if that wallet is accessed through a foreign-based service or if the wallet provider is registered outside the U.S., it could still count. The IRS doesn’t care if you control the keys—it cares about where the asset is physically or legally tied. This is why people who moved crypto to a non-U.S. exchange for lower fees or better liquidity suddenly find themselves in compliance trouble. The FATCA rules were designed to catch hidden offshore assets—and crypto is now firmly in that net.

There’s no gray area: if you’re a U.S. taxpayer and you held crypto on foreign platforms above the threshold, you owe Form 8938. No exceptions for small balances, no leniency for ignorance. The IRS has been cross-referencing blockchain data with foreign bank disclosures since 2021. They’re already matching wallet addresses to U.S. IP addresses and flagged transactions. If you didn’t file and you should have, the best move is to amend your return now—not wait for a notice.

What you’ll find below are real cases from U.S. crypto holders who got caught—some because they forgot, others because they thought they were exempt. You’ll see which exchanges triggered filings, how much crypto crossed the line, and what happened when people ignored it. There are no hypotheticals here. Just facts, penalties, and how to fix it before it’s too late.