US Crypto Traders: How to Report Foreign Exchanges for FinCEN/FBAR Compliance

Wait a sec... so if my two accounts combined were over $10k at ANY point during the year, I have to file this form? What if one account had $9k and the other had $2k but at different times of the year, and they were never simultaneously over $10k combined? Do I still need to report?

The FBAR threshold is based on the aggregate maximum value of all your foreign financial accounts at any point during the year. So in your example, if one account had $9k and another had $2k, even if they peaked at different times, you'd still have a combined maximum of $11k across your accounts for the year, which exceeds the $10k threshold. The key is to look at each account's highest balance during the year independently, then add those maximum values together. If that sum exceeds $10k, you need to file the FBAR. It's not about whether they simultaneously exceeded $10k together on a specific date.

Does it actually connect to the exchanges and import your transaction data? I've got thousands of trades across multiple platforms and manually tracking everything is a nightmare.

Sounds interesting, but how accurate is it with the constantly changing crypto regulations? Last year I used a different service and they missed several key reporting requirements that my accountant caught later. Especially with these foreign accounts, I'm paranoid about missing something and getting hit with penalties.

It doesn't automatically connect to the exchanges - you need to download your transaction history from each exchange and upload it to the platform. Once you do that, it processes everything and helps identify what needs to be reported. Regarding the changing regulations, that's actually one of the strengths of the platform. They continuously update their system based on the latest IRS guidance and tax court rulings. I was particularly impressed with how it flagged staking rewards that needed to be reported as income, which my previous tax software completely missed. The FBAR and international exchange reporting guidance was particularly helpful since those requirements aren't widely understood even by many tax professionals.

How exactly does this work? I thought it was impossible to get a human on the phone at the IRS these days. Is this some kind of priority line or what?

Sounds like BS to me. How would a third-party service get you through to the IRS faster than calling directly? The IRS doesn't have some special line for certain people. They're probably just charging you to call the same number everyone else uses.

It's not a priority line or anything like that. What they do is use an automated system that continually calls the IRS and navigates the phone tree until it gets through to a hold queue. Once it reaches that point, it calls you and connects you, saving you from having to redial constantly or sit on hold for hours. The service doesn't give you any special access - it just handles the frustrating part of getting through the initial IRS phone system. I was skeptical too at first, but when I needed clarification on these crypto reporting requirements, I was desperate enough to try anything. I ended up getting my questions answered about how to properly document my foreign exchange balances for FBAR, which saved me a lot of uncertainty.

Do you include stablecoins in your calculations? Like if I have USDT or USDC on a foreign exchange, is that counted toward the $10k threshold?

Yes, stablecoins absolutely count toward your total balance for FBAR reporting purposes. Any crypto assets you hold on foreign exchanges, including USDT, USDC, or any other stablecoins, need to be included when calculating whether you meet the $10k threshold. The IRS and FinCEN are concerned with the total value of your foreign financial assets, not just traditional currencies. This is a common misconception that can lead to compliance issues. Remember that the value needs to be converted to USD at the time of reporting, though for stablecoins that's obviously pretty straightforward.

No, using a VPN doesn't make a US exchange "foreign" for FBAR purposes. What matters is where the exchange is actually headquartered/incorporated, not how you access it. Coinbase is a US exchange regardless of whether you access it from a US IP or through a VPN in another country. That said, be careful with VPNs as some exchanges have terms of service that prohibit using them, and it could potentially lead to account restrictions.

That makes sense, thanks for clarifying! I was getting confused between the access method and the actual jurisdiction of the exchange. Sounds like I still need to report my Binance and KuCoin accounts since they're actually foreign-based exchanges, regardless of how I connect to them.

This is really helpful, thanks for sharing your experience! The monthly screenshot idea is brilliant - much more manageable than trying to track daily fluctuations. Quick question though: when you say "account number" for the FBAR form, what exactly did you use for crypto exchanges? I know my login email and have API keys, but I'm not sure these exchanges assign traditional account numbers like banks do. Did you just use your user ID or something else?

Great question! For the account number field on the FBAR, I used my user ID that's displayed in the account settings of each exchange. For Binance, it was the numeric user ID you can find under your account profile. For Kraken, I used the account identifier they show in the API section. Some people use their email address if that's the primary account identifier, but the user ID felt more appropriate since it's more like a traditional account number. The key is to use something that uniquely identifies your specific account on that platform. I also kept screenshots of where I found these identifiers in case I ever needed to reference them again. The IRS guidance isn't super specific about crypto exchanges, but as long as you're consistent and can clearly identify the account, you should be fine. I'd recommend documenting what identifier you chose and where you found it, just to keep your records clean.

This is really comprehensive advice, thanks! I'm just getting started with crypto taxes and the separate filing requirement for FBAR was news to me. Quick clarification - when you mention using Treasury exchange rates for foreign currency conversions, are you talking about situations where the exchange shows balances in EUR or other fiat currencies? Or does this also apply when converting crypto values to USD? Most of my exchanges show everything in USD already, but I want to make sure I'm not missing something important.

Good question! The Treasury exchange rate requirement primarily applies when you're dealing with balances displayed in foreign fiat currencies (like EUR, GBP, etc.). If your exchanges are already showing everything in USD, you're generally good to go. However, there can be some edge cases to watch for: some exchanges might show your crypto holdings in their "native" value (like showing 1 BTC as 1 BTC) and then separately display the USD equivalent. In those cases, you want to make sure you're using a consistent method for USD conversion - either the exchange's conversion rate at the time, or a standard reference like CoinMarketCap or CoinGecko for that specific date. The key is consistency and documentation. If you're using the exchange's USD conversion, keep screenshots. If you're using an external price reference, document which one and the specific prices you used. This becomes especially important if you ever get audited and need to explain how you arrived at your reported maximum balances. Most people won't need to worry about Treasury exchange rates for crypto, but it's good to be aware of the requirement if you encounter any non-USD denominated balances.

This is such a great point about funds in transit! I had a similar issue where I was moving Bitcoin from one exchange to another and the blockchain confirmation took longer than expected. Both exchanges were showing the balance temporarily, which would have definitely led to double-counting if I hadn't been careful. Your mention of lending platforms is really important too - I think a lot of people don't realize that platforms like Nexo or even some of the newer DeFi lending protocols based outside the US could trigger FBAR requirements. It's not just traditional "exchanges" but any foreign platform where you're holding crypto assets. The complexity of this stuff is exactly why I've been considering getting professional help for next tax season. Between tracking maximum balances, avoiding double-counting during transfers, and making sure I'm not missing any foreign platforms that count as "financial accounts," it feels like there are so many ways to accidentally mess up the reporting. Has anyone here worked with a tax professional who specializes in crypto? I'm wondering if it's worth the extra cost to avoid potential compliance issues.

This is incredibly helpful - thank you for sharing your experience! I'm definitely in that "first year dealing with foreign exchanges" category and feeling overwhelmed by all the requirements. The point about Binance having tax reporting statements is huge - I had no idea that was available and have been trying to manually track everything through their regular transaction history. Quick question about the Form 8938 threshold you mentioned - when you say $50k for single filers, is that based on the same "maximum aggregate balance" calculation as FBAR, or is it calculated differently? I want to make sure I understand if I might need both forms. Also, do you have any recommendations for finding tax professionals who actually understand crypto? I've called a few local CPAs and most of them seemed uncomfortable with crypto questions, let alone foreign exchange reporting requirements.