US Expatriate Crypto Tax: What You Need to Know Before Filing

When you're living abroad, it's easy to think crypto taxes don't apply to you. But US expatriate crypto tax, the obligation for American citizens and green card holders to report global crypto income to the IRS, regardless of where they live. Also known as foreign crypto reporting, it's not optional—even if you never set foot in the U.S. since 2010. The IRS doesn't care if you're in Thailand, Mexico, or Portugal. If you're a U.S. person, your crypto trades, staking rewards, airdrops, and even swapping one coin for another are taxable events.

Many expats assume they’re off the hook because they pay taxes locally. That’s not how it works. The U.S. taxes based on citizenship, not residency. So even if you’re paying income tax in Germany or Indonesia, you still have to file a U.S. return and report every crypto transaction. And it’s not just about selling Bitcoin. Buying coffee with Ethereum? Taxable. Receiving a crypto airdrop while living in Ecuador? Taxable. Earning yield from a DeFi protocol on the TON blockchain? Also taxable. The IRS crypto rules, the set of guidelines that classify cryptocurrency as property, not currency, triggering capital gains and income tax. Also known as crypto as property, it means every trade is a potential tax event. You don’t get a pass just because you’re overseas.

Then there’s the reporting side. If you hold more than $10,000 in crypto across foreign wallets or exchanges at any point during the year, you must file an FBAR. If you own more than $200,000 in foreign assets (including crypto) by year-end, you need to file Form 8938. These aren’t suggestions—they’re legal requirements with steep penalties. And the IRS is getting better at catching expats. They’re sharing data with foreign exchanges, tracking blockchain activity, and cross-referencing FATCA reports. One guy in Spain got hit with a $50,000 penalty for not reporting his Bitcoin holdings. He didn’t even sell it—he just held it.

There’s a difference between filing and paying. Most expats qualify for the Foreign Earned Income Exclusion, which lets you exclude up to $126,500 (2024) of earned income. But here’s the catch: foreign crypto income, crypto earnings like staking, lending, or mining received while living abroad. Also known as overseas crypto earnings, it’s not eligible for the exclusion—it’s treated as ordinary income, not earned income. So if you earned $15,000 in ETH staking rewards in Japan, that’s fully taxable. No exemption. No loophole. Just a line on Form 1040.

You might be tempted to ignore it. But the risk isn’t worth it. The IRS has a whole unit dedicated to offshore crypto enforcement. They know where you live. They know what exchanges you use. And they know how to trace blockchain addresses. What you need now isn’t hope—it’s a clear plan. Whether you’re holding Solana tokens in Bali, trading on DeDust from Portugal, or earning from a Sui-based DEX in Colombia, the rules are the same. Report everything. Keep records. Know your basis. And don’t assume your local bank or tax advisor knows how crypto works—most don’t.

Below, you’ll find real reviews and breakdowns of crypto exchanges, scams, and tax-relevant platforms that expats actually use. No fluff. No theory. Just what works, what doesn’t, and what the IRS is watching.