FBAR Rules for Foreign Crypto Accounts in 2025: What U.S. Taxpayers Must Know

May, 29 2025

U.S. taxpayers with crypto holdings on overseas exchanges suddenly find themselves in a reporting maze that looks a lot like the one for foreign bank accounts. Since FinCEN’s 2020 announcement, the FBAR cryptocurrency reporting requirement has been solidified, meaning the old belief that virtual currencies were exempt is now history. If you’ve ever wondered whether your Binance or KuCoin balance triggers a filing, this guide walks you through the rules, the numbers, and the steps you need to stay on the right side of the IRS.

What Triggers an FBAR for Crypto?

FBAR (FinCEN Form 114) requires you to report any foreign financial account that, taken together, exceeds $10,000 at any point during the calendar year. The definition of a "foreign financial account" now explicitly includes Foreign Cryptocurrency Account. That means if you own crypto on a non‑U.S. exchange, the balance counts toward the $10,000 threshold.

• All accounts are aggregated-your Binance, KuCoin, Bitfinex, and even a foreign‑based wallet provider count together.
• The threshold is reached the moment your combined holdings hit $10,001, even if it’s just for a single day.
• The rule applies whether you own the crypto outright or have a contractual right to withdraw it.

In practical terms, a single spike in Bitcoin price can push a modest portfolio over the limit, obligating you to file.

Key Dates and Deadlines for 2025

The filing calendar hasn’t changed with the crypto inclusion:

1. Original deadline: April 15, 2025.
2. Automatic extension to October 15, 2025, if you need more time.

Both dates are firm; the IRS does not grant further extensions unless you qualify for a reasonable‑cause waiver.

Valuation: How to Calculate the Maximum Value

Because crypto prices swing wildly, the IRS demands you report the "maximum value during the year" in U.S. dollars. Here’s a practical way to get it right:

• Pick a reliable source-CoinMarketCap, CoinGecko, or the exchange’s own price feed.
• Capture the daily high for each asset on each exchange. Many tax‑tracking tools (like Koinly or CoinLedger) can automate this.
• Convert each daily high to USD using the same source you chose, then sum across all accounts.

If the sum tops $10,000 on any day, you must file. The methodology must be consistent; switching sources mid‑year can raise red flags.

Gathering the Required Information

The FBAR asks for five data points per account:

1. Name on the account.
2. Account number (or a unique identifier if the exchange doesn’t use traditional numbers).
3. Name and address of the foreign institution (the exchange’s legal entity and headquarters).
4. Type of account (e.g., "cryptocurrency exchange account").
5. Maximum value during the year (in USD).

For most major exchanges-Binance, KuCoin, Bitfinex, Bitstamp-you can pull this data from the account statements section or request a formal statement via support.

Filing the FBAR: Step‑by‑Step

Unlike most tax forms, the FBAR is filed electronically through the BSA E‑Filing System. No paper copy, no filing with your regular tax return.

1. Create a BSA E‑Filer account if you don’t already have one (the process is free and takes about 10 minutes).
2. Log in and select “File FBAR - FinCEN Form 114.”
3. Enter the required details for each foreign crypto account. The system will automatically calculate the aggregate value.
4. Submit the form. You’ll receive an electronic acknowledgment within 24 hours.
5. Keep the acknowledgment and all supporting records for at least five years from the filing deadline.

If you’re filing under an ITIN instead of an SSN, the IRS explicitly allows it, so don’t let a missing SSN stop you.

Penalties, Enforcement, and How to Fix Past Mistakes

Non‑compliance can be costly. The latest guidance from Dimov Tax warns of penalties up to $16,536 per unreported account per year, and there’s no statute of limitations on FBAR violations. That means an unfiled crypto account from 2018 could still be pursued today.

Fortunately, the IRS offers a path to mitigate damage:

• Voluntary disclosure. File the missing FBARs as soon as you become aware. The sooner you act, the more likely you’ll avoid the maximum penalty.
• Streamlined Filing Compliance Procedures. If you’re not under audit and your failure was non‑willful, you may qualify for reduced penalties.
• Seek professional help. Enrolled agents and CPAs familiar with BSA reporting can file on your behalf and ensure you meet the record‑keeping rules.

Remember, the cost of a penalty far outweighs the time spent gathering statements and filing on time.

Comparison: FBAR vs. FATCA vs. Form 8938

The FBAR has the lowest threshold and the broadest definition of "financial account," so many crypto holders end up filing both FBAR and Form 8938.

Practical Tips from the Front Lines

• Use a dedicated crypto tax software. Tools from CoinLedger and Koinly can auto‑import exchange balances and generate the daily‑high values you need for FBAR.
• Document your valuation method. Keep a screenshot of the price source you used on the day of the high value; the IRS may ask for proof.
• Don’t ignore small accounts. A $5,000 balance on three different exchanges adds up to $15,000 and triggers reporting.
• Review annual statements. Some exchanges now provide a consolidated “Annual Tax Report” that includes the maximum balance figure.
• Stay updated. BrightTax and Verni Tax Law regularly publish updates; the guidance could shift again in future years.

Frequently Asked Questions

Staying compliant isn’t optional-it’s the only way to avoid steep penalties and keep your crypto ventures thriving. Use the steps above, keep solid records, and file on time. When in doubt, bring a tax professional into the loop before the October deadline.