US Treasury to require cryptocurrency holders to file an FBAR
|- The US Treasury announced that crypto holders might need to require FBAR disclosures.
- United States persons are already required to file an FBAR if their foreign financial accounts exceed $10,000.
Despite the US Treasury stating several times that cryptocurrency holders will not be required to report their holdings to the Financial Crimes Enforcement Network (FinCEN), the bureau just announced that they intend to amend the rules and require FBAR disclosure for virtual currencies.
An FBAR is defined as a Foreign Bank Account Report, also known as Form 114. To submit the report, anyone that is required to do so needs to do it with FinCEN. Failing to file this form can come with heavy penalties.
Back on December 30, 2020, FinCEN published a short notice that stated:
Currently, the Report of Foreign Bank and Financial Accounts (FBAR) regulations do not define a foreign account holding virtual currency as a type of reportable account. (See 31 CFR 1010.350(c)). For that reason, at this time, a foreign account holding virtual currency is not reportable on the FBAR (unless it is a reportable account under 31 C.F.R. 1010.350 because it holds reportable assets besides virtual currency). However, 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 under 31 CFR 1010.350.
It seems that the recent institutional interest in Bitcoin and the growth of the cryptocurrency market is forcing governments to take action. The FBAR report is due on April 15 usually, which means it’s most likely not going to be enforced for 2020.
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