US Expatriate Crypto Tax: What You Need to Know in 2025

When you're a US expatriate, a US citizen or green card holder living outside the United States. Also known as American abroad, you're still subject to US tax laws—even if you earn, trade, or hold crypto in another country. The IRS doesn't care where you live. If you're a US person, your crypto activity is taxable. That means buying Bitcoin in Thailand, selling Ethereum in Portugal, or staking Solana in Mexico? All reportable. And if you skip reporting, you're not just risking penalties—you're risking criminal charges.

The real problem? Most expats assume their local tax rules replace US ones. They don't. The FATCA, Foreign Account Tax Compliance Act, a US law requiring foreign financial institutions to report accounts held by Americans forces banks and exchanges abroad to send your data to the IRS. Even if you use a no-KYC exchange, your wallet activity can still be traced through blockchain analysis tools the IRS now uses. And don't count on the Foreign Earned Income Exclusion—it doesn't apply to capital gains from crypto sales. Every trade, swap, or spend is a taxable event. You don't need to cash out to USD. Buying coffee with Bitcoin? That's a taxable sale.

What about crypto you hold in foreign wallets? The FBAR, Report of Foreign Bank and Financial Accounts, a form that requires Americans to disclose foreign financial accounts exceeding $10,000 at any point in the year applies to crypto wallets if they're hosted by a foreign exchange or custodial service. Non-custodial wallets (like MetaMask) don't count—unless you're using a foreign exchange that holds your keys. But if you're using Binance, Kraken, or Coinbase outside the US, and your balance crosses $10,000, you must file Form 114. Miss it? Fines start at $10,000 per year, per account. And if the IRS thinks you did it on purpose? That’s up to 50% of your account value.

And then there's the Form 8938, Statement of Specified Foreign Financial Assets, which requires Americans to report foreign-held assets worth more than $200,000 on the last day of the year. Crypto counts here too. You might think you're safe if you're under the threshold—but you're not. You still need to report every crypto transaction on your 1040. The IRS now cross-references crypto data from exchanges, blockchain analytics firms, and even whistleblower tips. If you're filing taxes from Bali, Berlin, or Bogotá, your digital trail is still visible to the IRS.

So what do you actually need to do? Track every transaction—buys, sells, swaps, airdrops, staking rewards. Use a crypto tax tool that supports foreign exchanges. Keep records of your cost basis and fair market value in USD at the time of each trade. File Form 8949 and Schedule D with your 1040. File FBAR if your foreign accounts hit $10,000. File Form 8938 if your total foreign assets hit $200,000. And if you've been ignoring this for years? The IRS has amnesty programs. Don't wait for a letter.

Below, you'll find real-world breakdowns of how other expats are handling crypto taxes—from those who got caught to those who got it right. No fluff. No theory. Just what works when you're living overseas and the IRS is watching.