How to File an FBAR for Crypto Held on International Exchanges
What is the FBAR?
The FBAR, or FinCEN Form 114, is the Foreign Bank Account Report. If you are American, then you need to file one if you ever exceed $10,000 at any time total held in foreign cryptocurrency exchange accounts at any time of the calendar year.
FinCEN (the Financial Crimes Enforcement Network) created the FBAR in order to track foreign financial assets to prevent crimes like tax evasion. While they haven’t released specific reporting requirements for crypto, there’s nothing wrong with submitting a crypto FBAR in order to be safe.
In order to fill out the FBAR report, you will need to know the highest values that your crypto holdings reached in each non-U.S. exchange during the tax year, in USD equivalent value.
The process may seem daunting, but ultimately it’s not that difficult to electronically file the FBAR via their BSA-E filing system. TokenTax can generate a report that tells you the highest value of the year in USD. Generate this form in your Documents page. If you are a Basic or Premium user and need to purchase the FBAR add-on, you can do so at the checkout page.
I've heard that FinCEN may have said that the FBAR is not required for crypto. Is this true?
A recent Forbes article has stated that FinCEN said that the FBAR is not required for crypto. However, the article's source of this information is via "a request for guidance from an accountants' group." There's no information about what this accountants' group is or what the email exchange was, nor any official confirmation from FinCEN.
To take the most conservative approach, it's best to file the FBAR anyways and to only fully assume the FBAR is not required for crypto once FinCEN releases official guidance.
Also keep in mind that there could be situations where you could have held over $10k in fiat on a foreign exchange, even if briefly, thus making you applicable for FBAR rules even if they end up not applying to crypto. For example, you can trade to USD on Bitfinex even though it is a foreign exchange.
How do I file the FBAR?
Individuals can e-file the FBAR here. Most of our clients elect to use the e-file form which can be completed within your web browser.
You begin by filling out your personal information in Part I.
Parts II or III are for filling out the information of foreign exchanges you held crypto in. If you are a single filer, then fill out Part II; if you are filling the FBAR out for jointly held accounts, then use Part III.
In part II / III, you can create multiple copies of the form by clicking the + box at the top of the form to create multiple entries for multiple exchanges.
For each exchange, here's how we fill typically fill out the FBAR:
The maximum account value is from the top row of the FBAR report that TokenTax generates.
For "Type of account," select "Other" and then in the box to the right, type in "Cryptocurrency exchange."
"Financial institution name" is the name of the exchange.
"Account number or other designation" can be the email address used for the exchange login.
For the address, fill it out to the best of your ability. Some exchanges have their addresses findable via Google, while others keep their address secret for security reasons. At minimum, the exchange's country should be entered. You can find a list of popular foreign exchanges's countries below.
The final parts, IV and V, are typically left blank. Finally, add your signature to the document and submit.
Consult FinCEN’s instructions for more support on filing the FBAR.
Other common FBAR questions
Do I file with the report that TokenTax gives me?
Our own report is not the one you file with FinCEN, rather, it is a document that tells you the highest USD value per exchange, which is the information you’ll need to complete the FBAR. We don’t generate pre-filled FBARs because the documents requires non-crypto personal information.
Do I need to include all exchanges where my assets went over $10,000 USD during the year?
If your total foreign assets amount across all foreign exchanges goes over $10,000, then you need to include all foreign exchanges on your FBAR, even if they didn’t all breach the $10k threshold individually. Keep in mind that the FBAR only needs to be filed for foreign exchanges, not exchanges based in the United States.
Which of my exchanges are non-U.S. based?
You'll need to know which exchanges are foreign if you file an FBAR. Here is a list of common non-U.S. based exchanges.
Note that wallets and decentralized exchanges are generally not reported on the FBAR, as it’s not an account on a foreign exchange but rather a wallet you control.
Common foreign exchanges
Bithumb (South Korea)
BTC Markets (Australia)
Cryptopia (New Zealand)
Gate.io (Cayman Islands)
HitBTC (Hong Kong)
KuCoin (Hong Kong)
The Rock Trading (Italy)
Common U.S. exchanges that do not need to be included on the FBAR
Here is a list of the most common U.S. based exchanges, so that you know that these do not need to be included on the FBAR.
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