Do I need to report cryptocurrency held on a foreign exchange?

The answer is evolving, so treat crypto carefully. Historically FinCEN said virtual currency held in an offshore wallet was not, by itself, an FBAR-reportable account, but it has signaled an intent to change that, and an account at a foreign exchange that also holds fiat or other assets can already be reportable. For Form 8938, crypto held through a foreign financial institution or that functions as a foreign financial asset can be reportable once thresholds are met. Separately, all crypto sales and exchanges are taxable events on your return regardless of where the exchange sits, and there's a 'digital asset' question on Form 1040 you must answer truthfully. Given the moving rules, the cautious approach is to track holdings on every foreign platform and confirm current-year requirements before filing. If a big chunk of your assets sits on an offshore exchange, raise it with your preparer specifically.