The Financial Crimes Enforcement Network (FinCEN) wants Americans to report if they have more than $10,000 in cryptocurrencies with foreign financial or virtual asset service providers.
It has been reported that FinCEN announced its intention to amend the Bank Secrecy Act’s Foreign Bank and Financial Accounts (FBAR) regulations in a rulemaking notice published on New Year’s Eve.
The report stated:
“FinCEN intends to propose to amend the regulations implementing the Bank Secrecy Act (BSA) regarding reports of foreign financial accounts (FBAR) to include virtual currency as a type of reportable account.”
However, the rule change would appear to bring FBAR rules around crypto holdings in line with cash held outside the US by citizens or other Americans.
It could have the most visible impact on users of crypto exchanges like Bitstamp and Bitfinex. FBARs must be filed by individuals who have an aggregate of over $10,000 in foreign financial accounts, including currencies. Current regulations do not designate virtual currencies as an FBAR-reportable account, however. This amendment would end that exemption.
Likewise, according to the Internal Revenue Service (IRS) website, FBARs must include the name on the account, account number, name and address of the foreign bank, type of account, and the maximum value held during the year.
Also, according to the website, individuals who fail to file face various penalties, including fines.
It has been analyzed that the public notice, published just a week before Christmas, has drawn the ire of the crypto community both for its potential impact on various crypto projects and having a shorter-than-usual comment period over US federal holidays.
Thus, if both these proposed rules are implemented, Americans might have to report crypto holdings and transactions in excess of $10,000 regardless of where they are held.