Covered Expatriate: Crypto Rules for Living Abroad

When you’re a covered expatriate, a person who gives up U.S. citizenship or long-term residency and meets certain financial thresholds under IRS rules. Also known as tax expatriate, it means you’re no longer under the U.S. tax net—but your crypto holdings might still be tracked, taxed, or seized. This isn’t about hiding money. It’s about understanding how blockchain, global regulations, and IRS enforcement intersect when you live outside the U.S.

Being a covered expatriate doesn’t erase your past crypto activity. The IRS still sees your wallet addresses, past transactions, and even token sales if they happened before you left. If you held $2 million in crypto or paid over $178,000 in U.S. taxes in the last five years, you’re flagged. And with blockchain tracing tools like Chainalysis and Elliptic now used by tax agencies worldwide, pretending your crypto is invisible won’t work. Offshore crypto accounts, once thought to be safe havens, are now high-risk targets. Countries like Vietnam and Russia have strict controls, while the UK’s FCA and SEC in the U.S. demand full disclosure—even from former citizens.

It’s not just about taxes. If you moved to Iran and mined crypto without a license, you’re funding the IRGC. If you used crypto to bypass sanctions in Venezuela, you’re playing with Petro—a government tool, not a currency. Even if you think you’re just trading on Binance P2P in Nigeria or using Jupiter on Solana, your activity leaves a trail. The SEC fined $4.98 billion in 2024, mostly targeting unregistered securities and DeFi platforms. If you’re a covered expatriate and still trading, staking, or holding tokens like LRDS, ERTHA, or SPH, you’re not just risking fines—you’re risking criminal charges.

Most people think leaving the U.S. means leaving crypto problems behind. It doesn’t. The real issue isn’t where you live—it’s whether you’ve filed Form 8854, disclosed foreign accounts, and reported all crypto gains. The posts below show you exactly how this plays out: from Nigerian P2P traders caught in cross-border audits, to Russian investors stuck with ruble restrictions, to Americans who tried to hide their JUP or LRDS tokens offshore—and got caught. You’ll see real cases, real penalties, and real strategies used by those who got it right. No fluff. No theory. Just what happens when crypto meets the law after you move abroad.