FinCEN Likely to Ask U.S. Citizens to Report Their Offshore Crypto Holdings Above $10,000

01. Jan 2021 Posted by Akolkar B on News

The Financial Crimes Enforcement Network (FinCEN), the U.S. Treasury Department wing has initiated some aggressive measure for users to report their crypto holdings. Earlier this month, FinCEN passed a proposal to introduce new crypto rules for unheated cryptocurrency wallets.

The rules aim to bring the Bank Secrecy Act’s Foreign Bank and Financial Accounts (FBAR) regulations to the crypto space thereby reporting any transactions above $10,000 through the wallets.

Now, the FinCEN is willing to expand its outreach even further noting that Americans will have to report and crypto transactions above $10,000 done through foreign and virtual asset service providers.

A brief notice issued by the FinCEN states: “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, FinCEN hasn’t provided any timeline yet regarding the implementation of this new proposal. The rule change is likely to bring FBAR rules for crypto holdings in accordance with the cash held outside the United States by its citizens. This could possibly have an impact on popular foreign crypto trading platforms like Bitfinex or Bitstamp that has a larger user-base of U.S. citizens.

As per the current regulations, individuals have to file FBAR for holdings more than $10K in foreign bank accounts. The existing framework doesn’t consider cryptocurrencies as FBAR reportable accounts.

Cryptocurrency regulations will be likely be taking preference in 2021 as Bitcoin (BTC) and other cryptocurrencies penetrate into the mainstream financial markets. Probably, we can see it more at a global level.

On the other hand, with a change in the SEC leadership, it is very likely that the talks about Bitcoin ETF will be coming to the forefront. New York-based VanEck Associates Corp. has reportedly started pushing the launch for its Bitcoin ETF.

“The VanEck Bitcoin Trust would reflect the performance of the MVIS CryptoCompare Bitcoin Benchmark Rate. VanEck may be betting that a change in SEC leadership -- with Jay Clayton stepping down as chairman -- combined with Bitcoin’s growing adoption on Wall Street have improved the odds of regulatory approval,” reports Bloomberg.