US Person (Citizen, Residents) and Cryptocurrency Exchanges Overseas 

In today’s post, I would like to focus on cryptocurrency exchanges overseas.

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1. Points to be Considered When Having Accounts with Cryptocurrency Exchange Overseas

This depends on the balance in your overseas cryptocurrency exchange account, but you might need to file report your account in FBAR (Foreign Bank and Financial Accounts) or Form 8938 (Statements of Foreign Accounts) as foreign accounts or foreign holding assets.  Since formal guidance has not issued so far if account with overseas cryptocurrency exchanges should be treated as foreign account, some people would say we should report, while others would say we do not need to do so.

Note: I plan to post a separate article regarding FBAR and Form 8938.

So if you would like to avoid reporting obligations, you might want to keep the account balance low if you have an account with foreign cryptocurrency exchange, or give up to use foreign cryptocurrency exchange and use US-based exchange.

See article below for US-based cryptocurrency exchanges.

In this post, I would like to introduce cryptocurrency exchanges that are available for U.S. based customers. Coinbase, Kraken, Bitflyer, Gemini, Binance US are briefly explained; all of them accept depositing and withdrawing in US dollars. Explanation about the investment apps Robinhood, the online payment system PayPal as well as brokerage firm Fidelity are also added.

2. Cryptocurrency Exchanges Overseas

As a resident of New York, I only have access to limited number of cryptocurrencies compared to residents of other states who can open an account with Bittrex, Poloniex, Kraken, etc.  Therefore, I plan to look around more, and might add explanation of additional overseas exchanges in this section when I come across possible alternative to Binance.

2.1 Binance — Up to September 11, 2019

Caution: On June 14, 2019, Binance announced that starting from September 12, 2019, “US Person” cannot deposit to or trade on Binance.com.  Since the term “US person” is used, I think it is safe to assume that the person restricted to use Binance will include not only US citizens, but also US Residents as defined in the US tax law, which include green card holders as well as certain non-US citizens who live in the US.  (For the definition of US Tax Persons under Tax Law, please refer to IRS: Classification of Taxpayers for US Tax Purposes.

 Since it seems US Person can continue to access to account in Binance.com itself even after September 12th, U.S. customers may be able to transfer money to other exchanges or external wallets even after the set date.  However, if you have an account with Binance.com and are currently storing cryptocurrencies there, you might be better off converting such cryptocurrencies to those currencies which are tradable in the US exchanges.  And if necessary, you might want to consider moving them to domestic exchanges or moving to a hard wallet.

Alternatively, since Binance also announced that they intend to open a separate exchange called “Binance US” for US customers, you could choose to wait and see if you can directly transfer cryptocurrencies from Binance.com to Binance US. (see Binance Announces Partnership with BAM to Launch US Exchange)

Website:  https://www.binance.com/en/

Binance was originally established in China, but subsequently moved to Malta.   Customers of Binance cannot deposit US dollar.  And after open the accounts, customers are supposed to transfer Bitcoin, Etherium or USDT, and convert them with other cryptocurrencies.   Although it is possible to transfer different cryptocurrencies, such as Litecoin, in that case, those currencies will be converted to Bitcoin, Ethrium or USDT first, the convert other cryptocurrencies.

Binance offers a very wide range of cryptocurrencies, which is well over 100 currencies, and seems to be actively updating the currency listing by stop handling unpopular cryptocurrencies, while adding new cryptocurrencies.  So Binance is the recommended exchange for people who want to trade in various cryptocurrencies.

In addition, Binance has high reputation for its cyber security, and although there have gone through attacks by hacker twice in the past (March 2018 and May 2019) as far as know, the hacking were immediately discovered and dealt with, which gave Binace just minimal damages.

2.2 KuCoin

Website:  https://www.kucoin.com/

Although I have not opened an account, I would like to briefly mention KuCoin as I often heard about this exchange.   This cryptocurrency exchange is based in Hong Kong.

Cryptocurrencies which can be traded: Listing extensive number of cryptocurrencies. (See https://www.kucoin.com/markets

Regarding funding, in addition to transferring cryptocurrencies from external sources, customers can purchase using credit cards (same with Binance mentioned above, services offered by Simplex are used).  (See KuCoin: How to Buy Coins by Credit Card?)

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『US Person (Citizen, Residents) and Cryptocurrency Exchanges Overseas 』へのコメント

  1. Name:O. Well Post:March 17, 2021 (Wed) 5:07 am ID:bea36ad79 Reply

    I am a US citizen but residing over 20 years in Germany. I just transferred my $1400 Biden Bucks at a 20% loss against the Euro, and went to register on Binance.com and was told I could not be registered as a “US person” therefore should register on the US site, where, of course, I would need to turn my Euros back into Dollars, wtf.