Missed FBAR: Crypto Exchange Accounts and Form 8938 in the UK

A Missed FBAR for a crypto account turns on what the account actually held. Under FinCEN Notice 2020-2, a foreign account holding only virtual currency is not currently reportable; one that also held sterling, euros or securities is. Form 8938 is a separate test, and most UK exchange accounts have held cash at some point.

At Jungle Tax we prepare US and UK returns for Americans living in Britain, and digital asset accounts are now the line on the foreign account schedule that takes longest to settle. The bank accounts are easy: they are either on the FBAR or they are not. An exchange account opened in London in 2019, funded in sterling, used for three years, partly moved to a hardware wallet and then closed when the platform withdrew from the UK is a different exercise. This guide sets out, account by account, what is and is not reportable on FinCEN Form 114 and on Form 8938, where the law is settled and where it is not, and how a missed year is put right.

It deals with the account-reporting question only. How gains, staking rewards and disposals are taxed in each country is covered elsewhere in our cross-border guides.

Is a foreign crypto exchange account reportable on the FBAR?

The honest answer has three parts: not if it held only virtual currency, yes if it held anything else that is reportable, and the first part may change.

What FinCEN Notice 2020-2 actually says

The governing statement is short. In FinCEN Notice 2020-2, issued at the end of December 2020, FinCEN confirmed that the FBAR regulations at 31 CFR 1010.350 do not define a foreign account holding virtual currency as a type of reportable account. For that reason, it said, such an account is not reportable on the FBAR at this time. Two qualifications sit inside the same paragraph:

• The carve-in. The account is reportable if it is a reportable account under the existing regulation because it holds reportable assets besides virtual currency.
• The warning. FinCEN stated that it intends to propose an amendment to the regulations to include virtual currency as a type of reportable account.

Why this remains unsettled in 2026

The Notice announced an intention, not a rule. As far as we can establish at the date of this guide, no final regulation bringing virtual-currency-only accounts within the FBAR has been issued, and the stated intention has not been formally withdrawn either. That leaves the position where it stood in 2020: a crypto-only foreign account is outside the form today, on the strength of a one-paragraph notice, with the regulator on record as wanting to change that. Anyone relying on the carve-out should check the current status on fincen.gov and on the IRS FBAR page for the year being filed, because the answer for a future calendar year may differ from the answer for 2025.

Two practical consequences follow. First, the Notice is a statement about the present regulation, so it supports the view that crypto-only accounts were not reportable in earlier years too; it does not create a filing gap to be cured. Second, a change, if it comes, is likely to apply to accounts that exist at that point, which is a reason to have the account history assembled now and not when the first deadline under a new rule arrives.

The hybrid account: why a sterling wallet changes the answer

This is where most UK-resident Americans are caught. A non-US exchange account is rarely crypto-only for its whole life. The usual pattern is a bank transfer in pounds, a balance that sits in a cash wallet for minutes or months, a purchase, and later a sale back into sterling or euros before withdrawal. For as long as fiat currency sits in that wallet, the account holds a reportable asset besides virtual currency, and it is a foreign financial account in the ordinary sense. If the aggregate of all your foreign accounts exceeded $10,000 at any time in that calendar year, which for anyone with a UK current account it almost always did, the exchange account belonged on that year's FBAR.

Three points are routinely missed:

• The $10,000 test is aggregate. The exchange cash wallet does not need to hold $10,000. A few hundred pounds of residual cash in a reportable account is enough once your other UK accounts carry you over the threshold.
• The test is per year. An account that held sterling in 2021 and only bitcoin in 2022 can be reportable for the first year and outside the form for the second. The review has to be done year by year.
• Maximum value. Once an account is reportable for a year, the cautious and widely adopted practice is to report the maximum value of the whole account, digital assets included, and not only the cash sub-balance. The Notice does not address the point directly, and we treat it as an area where over-disclosure costs nothing.

What makes the account foreign?

The location of the account, not of the customer. An account maintained by a US-organised platform is not a foreign account merely because you opened it from a London address. An account with a UK or other non-US entity is foreign, including where that entity is the local subsidiary of a US group and the app looks identical. The contracting entity is named in the terms of business and usually on the annual statement; it sometimes changes mid-relationship when a group restructures, which can move an account into or out of scope from one year to the next.

Signature authority over a company account

The FBAR also reaches accounts over which you have signature or other authority without owning them. A founder or finance director who can instruct transfers from a UK company's exchange account that holds a fiat balance may have a personal FBAR obligation for that account, separate from anything the company files. Form 8938 has no equivalent rule; it looks only at assets in which you have an interest.

Does Form 8938 apply to crypto held on a non-US exchange?

Form 8938 is a different form, filed with the income tax return, under a different statute, and FinCEN's Notice does not apply to it. It reports specified foreign financial assets, which fall into two groups: financial accounts maintained by a foreign financial institution, and certain other foreign assets held for investment outside an account, such as securities issued by a non-US person, an interest in a foreign entity, or a financial contract with a non-US counterparty.

Thresholds for taxpayers living abroad

For a taxpayer who qualifies as living abroad, the IRS comparison of Form 8938 and FBAR requirements gives the following filing thresholds for the total value of specified foreign financial assets:

• Unmarried, or married filing separately: more than $200,000 on the last day of the tax year, or more than $300,000 at any time in the year.
• Married filing jointly: more than $400,000 on the last day of the tax year, or more than $600,000 at any time in the year.

The thresholds are measured across everything reportable, so a UK brokerage account and UK bank balances usually carry a high-net-worth filer over the line before any digital asset is counted. The live question is then not whether to file Form 8938 but whether the exchange account belongs on it. Form 8938 is not required for a year in which no income tax return is required.

The custodial exchange account

Where a non-US platform holds assets on your behalf, so that you have a claim against the platform and it controls the keys, the account has the essential features of a custodial financial account. The IRS has not published guidance that says in terms that a foreign exchange is a foreign financial institution for this purpose, and commentators do not all agree. Our working position, which matches the prevailing practice among US preparers, is to treat a custodial account at a non-US exchange as a financial account maintained by a foreign financial institution and report it in Part V of Form 8938, including where it held only virtual currency and so fell outside the FBAR. The consequence of an omitted Form 8938 item is too serious, and the cost of including it too small, to do otherwise.

Self-custody: hardware and software wallets

Digital assets held in a wallet for which you alone control the private keys are generally outside both forms. There is no institution maintaining an account, so there is no foreign financial account for the FBAR, and bitcoin or ether held directly is not an account at a foreign financial institution or an interest issued by a foreign person for Form 8938. A hardware device kept in a London flat does not make the asset foreign. Two cautions apply: a wallet described as self-custody in which the provider in fact holds or can reconstruct the keys is custodial in substance, and what the wallet holds matters, as the next section explains.

Tokens that represent interests in foreign entities

A token is a wrapper, and Form 8938 looks through to what it represents. A token that carries an equity or debt interest in a non-US company, a share in a non-US investment vehicle, or a contractual claim against a non-US issuer can be a specified foreign financial asset in its own right, reportable in Part VI, even where it sits in a self-custody wallet. Tokenised securities held inside an exchange account also bear on the FBAR, because they are arguably reportable assets besides virtual currency, which is exactly the language of the carve-in.

Account by account: FBAR and Form 8938 compared

Account or holding	FBAR (FinCEN Form 114)	Form 8938
Non-US exchange account that held only virtual currency all year	Not currently reportable under Notice 2020-2; position unsettled and may change	Treated as reportable (Part V) on the prudent reading, if thresholds are met
Non-US exchange account that held any sterling, euro or other fiat balance in the year	Reportable; report maximum value of the whole account	Reportable (Part V)
Non-US exchange account holding stablecoins and other tokens, no fiat	Stablecoins are virtual currency; not currently reportable, with the same caveat	Treated as reportable (Part V)
Staking or lending account on a non-US platform	Not currently reportable if virtual currency only; reportable if a fiat balance exists	Reportable, as an account or as a contract with a foreign counterparty
Account with a US-organised exchange, opened from the UK	Not a foreign account	Not a foreign asset
Hardware or software wallet, keys held only by you	Not reportable	Generally not reportable
Token representing shares, debt or fund units of a non-US issuer	Depends on where held; may make a hybrid account reportable	Reportable (Part VI if held outside an account)
Exchange-traded crypto product held at a UK broker	Reportable as an ordinary securities account	Reportable (Part V)
UK company exchange account with fiat, you hold signing authority only	Reportable by you as signature authority	Not reportable by you

On the last-but-one row: an exchange-traded crypto note or fund held through a UK broker sits in an ordinary securities account that is reportable on both forms, and the product itself may need to be tested as a passive foreign investment company.

Staking, lending and stablecoin balances

Staking and lending platform accounts

When you place assets with a non-US platform to earn a return, you usually stop holding the asset and start holding a claim against the platform. For the FBAR the analysis is unchanged: if everything in the account is virtual currency, the Notice applies; if rewards are paid or swept into fiat, it does not. For Form 8938 the account is, if anything, more clearly within scope, because a contractual right to the return of assets plus yield from a non-US counterparty is a financial contract with a foreign person even if the platform were not a financial institution. On-chain staking from your own wallet, with no intermediary holding the assets, remains outside both forms as a reporting matter, although the rewards are still income.

Stablecoin balances

A sterling- or dollar-referenced stablecoin is not sterling or dollars. It is a digital asset, and for FBAR purposes we treat a stablecoin balance as virtual currency: it does not, on its own, turn a crypto-only account into a hybrid one. That is the natural reading of the Notice, but FinCEN has not said so expressly, and US legislation since 2025 has begun to treat payment stablecoins as a regulated category of their own. This is the single point on which we would most expect the position to move, and we note it on the file for any client who holds material stablecoin balances offshore.

How do you value a crypto account for FBAR and Form 8938?

Both forms ask for a maximum value during the year, in US dollars, and neither was written with a 24-hour market in mind.

• FBAR. Report a reasonable approximation of the greatest value of the account during the calendar year. For a bank account that comes from periodic statements; for an exchange account it has to be reconstructed from transaction history and daily prices. Convert non-dollar amounts using the Treasury year-end rate.
• Form 8938. Report the maximum fair market value during the tax year, and use the year-end value to test the threshold. A reasonable estimate is acceptable. Foreign currency amounts convert at the Treasury year-end rate.
• Price source. No official rate exists for bitcoin or ether. Use a published, verifiable price source, apply the same source and the same daily cut-off to every account and every year, and keep a note of the method. Consistency is what makes the figure defensible.
• Peak dates. The maximum value of a volatile holding seldom falls on 31 December. Compute a daily balance-times-price series and take the highest figure; do not use the year-end figure as a proxy.
• Zero or negative years. An account that was open but empty for the whole year is still listed if it was reportable; record the value as zero.

The Form 1040 digital asset question

Every Form 1040 asks, near the top of the first page, whether you received digital assets as a reward, award or payment, or sold, exchanged or otherwise disposed of them during the year. It is answered under penalties of perjury and is separate from account reporting: merely holding assets, or moving them between your own wallets and accounts, is generally a "no", while a single sale, swap or staking reward is a "yes". An incorrect answer on a past return is a matter to correct alongside any missed FBAR, because it bears on how the omission is characterised.

The income side, in brief

Account reporting and income reporting are separate failures with separate remedies. A US person in the UK reports disposals and rewards on the US return in dollars and on the UK Self Assessment return in sterling, under two different sets of rules for identifying which units were sold, with foreign tax credits bridging the two. Those mechanics are dealt with in our existing guides and are not repeated here. What matters for this purpose is one question: was the income from the account correctly reported on the US returns already filed? The answer decides which catch-up route is open.

What does the UK require?

The UK has no equivalent of the FBAR. A UK resident does not file an annual list of accounts with HMRC, and there is no balance-based disclosure for digital assets. HMRC obtains its information from the other direction. Under the cryptoasset reporting framework, UK reporting cryptoasset service providers have been required since 1 January 2026 to carry out due diligence on their users and to report transaction data to HMRC annually, with the first reports covering the 2026 calendar year; the framework is described in HMRC's Cryptoassets Manual at CRYPTO49000. Users are asked to self-certify their tax residence and identification numbers, and jurisdictions that have adopted the framework will exchange the data. The practical effect for an American in Britain is that a UK return and a US return prepared from different records are now more likely to be compared.

Question	United States	United Kingdom
Annual account-balance report by the individual?	Yes: FBAR to FinCEN, Form 8938 to the IRS	No equivalent
Who reports the account?	The taxpayer	The service provider, to HMRC
What is reported?	Maximum and year-end values per account	User identity and aggregate transaction data
Self-custody wallets	Generally outside both forms	Outside provider reporting; gains still returnable
Penalty for the reporting failure alone?	Yes, even where no tax is due	No stand-alone account penalty; penalties follow unpaid tax

How do you catch up on a missed FBAR for a crypto account?

Start by sorting each year into one of three positions. The route follows from the facts, not from preference.

Returns were right, only the FBAR was missed

If every US return was filed on time, all income from the account was reported and the tax paid, and only the FinCEN form omitted the account, the IRS delinquent FBAR submission procedures are the usual route. The late or amended FBARs are filed electronically through the BSA E-Filing System with a statement explaining why they are late. The IRS has said that it will not impose a penalty for the failure to file where income from the accounts was properly reported and tax paid, and the filer had not previously been contacted about an examination or the delinquent reports. This is the common outcome where an account was hybrid for a year or two and the holder, reasonably, believed crypto accounts were outside the form altogether.

Income was omitted as well

If disposals, staking rewards or interest from the account were left off the US return, or no US returns were filed at all, a late FBAR alone does not resolve the position. For a taxpayer whose conduct was non-willful and who meets the non-residency test, the Streamlined Foreign Offshore Procedures are designed for this: three years of original or amended returns with all required information returns including Form 8938, six years of FBARs, payment of the tax and interest, and a signed certification on Form 14653 setting out the specific reasons for the failure. No offshore penalty is charged under the foreign offshore version. The narrative has to be true, specific and consistent with the documents, and it is the part of the submission that deserves the most care. Preparing these submissions is the core of our US tax return work for UK residents.

Penalty exposure in general terms

Outside those procedures the exposure is real but should be stated accurately. A non-willful FBAR violation carries a civil penalty up to an inflation-adjusted maximum, which the US Supreme Court confirmed in 2023 is applied per report and not per account. A willful violation is far heavier, measured by reference to the greater of a fixed inflation-adjusted amount or half the account balance. The Form 8938 penalty is $10,000 for a failure to file, with further amounts if the failure continues after IRS notice, and an omitted Form 8938 can keep the assessment period for the whole return open. Our FBAR penalty calculator illustrates the ranges. In practice, for a non-willful filer who comes forward before any IRS contact, the correct procedure removes most or all of this.

Should a crypto-only account be disclosed anyway?

Many preparers list a crypto-only foreign exchange account on the FBAR even though the Notice does not require it. There is no penalty for reporting an account that was not strictly reportable, it removes any argument about whether a brief fiat balance existed, and it means the filing history is already in place if the regulation changes. Where the records are too thin to prove the account never held cash, we recommend inclusion.

Rebuilding the records: exchange exports and closed platforms

FBAR records must be kept for five years from the due date of the report, and a catch-up typically reaches back six. For each account you need the name and address of the institution, the account identifier, and the maximum value for each year. The sources, in order of reliability:

1. Full transaction exports. Download the complete history, not the tax summary: deposits, withdrawals, trades, fees, rewards and, critically, the fiat wallet ledger, which is what establishes whether the account was hybrid in a given year.
2. Bank statements. Sterling transfers to and from a platform prove that a cash balance existed and date it. They also identify the contracting entity through the payee name.
3. Email archives. Deposit confirmations, trade receipts and terms-of-business updates record account identifiers and changes of legal entity.
4. Data subject access requests. A UK or EU platform that has closed your account, or withdrawn from the market, must still respond to a request for your personal data, which includes transaction history.
5. Insolvency documents. Where a platform has failed, the claim form and any statement of account issued by the officeholder are evidence of the balance at the date of collapse. The account remains reportable for the years it was open, and the claim itself may need to be considered for Form 8938.
6. On-chain data. Transfers between the exchange and your own wallets can be verified independently and used to reconcile gaps.

Where a figure cannot be established, a documented reasonable estimate is acceptable and far preferable to omission. Record how it was derived.

A six-step review for UK-resident Americans

1. List every platform, app and wallet used since you became a US filer, including those now closed.
2. For each, identify the contracting entity and whether it is US or non-US.
3. Classify each as custodial or self-custody on the facts, not on the marketing.
4. For each custodial non-US account and each calendar year, establish whether any fiat balance or security was held.
5. Compute the maximum and year-end values in dollars using one price source.
6. Compare the result with the FBARs, Forms 8938 and income reported on the returns actually filed, and choose the catch-up route year by year.

Common errors we see

• Reading the Notice as saying crypto is never reportable, and overlooking the sterling wallet.
• Assuming the FBAR answer also settles Form 8938.
• Treating a UK subsidiary of a US group as a domestic account.
• Reporting the 31 December value as the maximum value.
• Omitting closed and failed platforms because no statement can be downloaded.
• Filing late FBARs quietly when income was also omitted, which forecloses a cleaner route.
• Answering the Form 1040 digital asset question inconsistently from year to year.

Putting it right

A missed FBAR for a digital asset account is, in most cases we see, an honest product of unclear rules: the regulator itself has said the form does not yet cover virtual currency, and few people noticed that a cash wallet changes the answer. That is a strong position from which to correct the record, provided it is done completely and before the IRS asks. Jungle Tax prepares the account-by-account analysis, the valuations, the delinquent FBARs or streamlined submission, and the matching UK returns for high-net-worth Americans in Britain. To have your accounts reviewed in confidence, contact our cross-border team for a confidential consultation.