FinCEN Form 114: What It Is, Who Needs It, and How It Affects Crypto Users

When you hold crypto in a foreign exchange or wallet, you might be required to file FinCEN Form 114, a mandatory report for U.S. persons with financial interests in foreign accounts exceeding $10,000 at any point during the year. Also known as FBAR, it’s not a tax form—it’s a financial disclosure tool run by the Financial Crimes Enforcement Network. If you’ve ever used Binance, Kraken, or any non-U.S. platform to trade or store Bitcoin, Ethereum, or other tokens, this form could apply to you—even if you never sold anything.

The rules haven’t changed for crypto, but the IRS and FinCEN are now actively tracking it. Any foreign-based exchange, wallet, or staking service that holds your assets counts as a foreign financial account, a digital or traditional account held outside the United States with financial value. That includes Ledger or Trezor if the company is based abroad and you use their cloud backup. It includes Coinbase if you’re using their international arm. It even includes DeFi protocols hosted on foreign servers if they’re under foreign legal jurisdiction and you have control over the keys.

People think they’re safe if they don’t cash out. They’re wrong. The threshold isn’t about profit—it’s about value. If your Bitcoin was worth $12,000 on December 15th, even for one day, you owe a Form 114. Failing to file can cost you $10,000 per violation, or up to 50% of your account balance if it’s deemed willful. And yes, the IRS now cross-checks crypto transaction data with FinCEN filings.

Some think this only applies to banks. It doesn’t. The definition of financial account is broad enough to cover any digital asset platform that acts as a custodian—even if it’s not regulated like a bank. The key question is: Did you give control of your assets to someone outside the U.S.? If yes, and the value crossed $10,000, you’re in scope.

There’s no gray area. No exceptions for small holders. No grace period for ignorance. And while most people filing Form 114 are reporting traditional bank accounts, crypto is now a top focus. The IRS has sent out thousands of letters to crypto users in the last two years, asking for proof of compliance. Many didn’t even know they needed to file.

What you’ll find in the posts below are real examples of how people got caught, what platforms trigger reporting, how to file correctly, and why ignoring this form is one of the biggest risks in crypto right now. You won’t find fluff. You’ll find facts about who’s being targeted, what FinCEN is looking for, and how to stay compliant without overcomplicating things.