The Foreign Account Tax Compliance Act (FATCA) is a U.S. law aimed at preventing tax evasion by American citizens using foreign financial institutions. Under FATCA, foreign banks and financial entities must report information about U.S. account holders to the Internal Revenue Service (IRS).With the growth of cryptocurrency, FATCA’s implications extend to digital assets. Cryptocurrency exchanges and platforms that handle U.S. customers must comply by reporting their users’ transactions and holdings to the IRS. This includes identifying U.S. taxpayers who may be using these platforms to avoid tax obligations.The law has led many cryptocurrency exchanges, especially those operating internationally, to implement strict Know Your Customer (KYC) and Anti-Money Laundering (AML) policies. These requirements ensure that they gather necessary information about their users to stay compliant.As a result, FATCA creates a complex landscape for users dealing with cryptocurrencies. U.S. citizens engaging in buying, selling, or trading digital assets must remain aware of their tax responsibilities to avoid penalties, as compliance is critical when interacting with both foreign and domestic platforms.