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If you’re an American living abroad with cryptocurrency on a foreign exchange, you’ve probably wondered whether those digital assets need to be reported to the US government. It’s a question that keeps many expats up at night, especially as tax authorities worldwide crack down on unreported offshore holdings.

The short answer is: it depends on where you hold your crypto. But the longer answer involves understanding how decades-old banking regulations are slowly catching up to modern financial technology. For Americans who’ve been holding digital assets on foreign platforms without reporting them, understanding the potential FBAR late filing penalty consequences and how to come into compliance is…