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I am specifically asking about the many crypto-currency exchanges which prohibit U.S. traders and would prefer if someone with first hand experience answered. Every exchange which offers derivatives such as perpetuals and futures and many that don't.

I.E. Bitmex, bitfinex, deribit, poloniex(no US margin)

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    I think you should ask "how many crypto-currency exchange survived for the past 3 years". In addition, tons of fake crypto-currency exchange pop up every day. Many of such "exchange" definitely not going to deal with traders that keep track of potential fraudulent exchange.. – mootmoot Jun 27 at 8:07
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    Didn't you answer your own question in your question... A US citizen is prohibited; can a US citizen ....? – UKMonkey Jun 27 at 15:49
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    @UKMonkey I was remotely hoping someone would reply that they had dual citizenship and used the second id to sign up. – user5389726598465 Jun 27 at 16:22
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    @user5389726598465 That sounds like fraud with more steps. When they ask "Are you a US citizen?" you'd basically be saying "No, I promise I'm not a US citizen, only a citizen of [second country]." – Nic Hartley Jun 27 at 16:24
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    Is there anything stopping you from just lying and clicking "No" when it asks you "Are you a US citizen", and then providing foreign bank details? It's not like they'd likely have the ability to check. – nick012000 Jun 28 at 9:46
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Yes a dual citizen can open account at crypto exchanges using the non-prohibited ID.

At time of writing, crypto exchanges that are not operating as a financial institution (bank, broker dealer, organization legally defined as a financial institution) do not have to deal with FATCA requirements. And US citizens that only have balances of crypto assets on foreign exchanges do not need to file FBAR reports.

https://www.thetaxadviser.com/news/2019/jun/virtual-currency-not-fbar-reportable-201921479.html

The AICPA Virtual Currency Task Force reached out to Treasury’s Financial Crimes Enforcement Network (FinCEN) to help practitioners answer this question. FinCEN responded that regulations (31 C.F.R. §1010.350(c)) do not define virtual currency held in an offshore account as a type of reportable account.

Foreign crypto exchanges are banning US citizens to comply with/avoid a very different set of regulations.

These typically come down to the US regulatory ambiguity around margin requirements, along with the US regulatory ambiguity of the assets they are trading.

Merely making a good faith effort to block Americans absolves them of liability. There is no legal consequence on the citizen for having access, and no legal consequence for the citizen for circumventing a block.

As such, doing whatever you need to do to have a working account on those exchanges is good enough. If you are actually a dual citizen, the answer is yes, you can have an account.

Don't tell them you are an American and don't consistently access from a US IP address.

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    It absolves them of liability, yes, but not you, if you lie while setting up your account. And if they have to go to court to prove that they didn't have any liability, do you really think they won't try to recoup their losses from the people who directly caused them to lose that money by lying about their identity? – Nic Hartley Jun 28 at 22:40
  • @NicHartley private actors can levy a lawsuit for any reason. When I said no legal consequences, I meant from public actors like the governments that promulgate the aforementioned regulations. – CQM Jun 29 at 1:37
  • Yes, technically, anyone can sue for any reason. But if you lie and, as a direct result, someone is forced to go to court and prove that they only did a bad thing because you lied to them, they're not only going to sue, they're going to win, and you're going to pay. – Nic Hartley Jun 29 at 3:41
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    @NicHartley doesn't change anything. My answer regarding "legal consequence" is about no laws or regulations being broken. A private plaintiff can sue anyone in civil court for any reason and might win and this has nothing to do with an actual law being broken. – CQM Jun 29 at 16:00
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Financial institutions are subject to additional reporting requirements where they deal with U.S. persons (→ FATCA). Many institutions therefore decline potential customers that are U.S. persons, either because the effort is uneconomical or because they are not allowed by local laws to report that data to the U.S.

U.S. persons are not only U.S. citizens, but any person who could owe taxes to the IRS, e.g. due to U.S. residence.

If you have a dual U.S. citizenship, you are still an U.S. person and will be refused by financial institutions that don't want to deal with FATCA. You cannot use your other citizenship to escape from U.S. person status (unless you renounce U.S. citizenship). You are therefore limited to institutions that do accept U.S. customers.

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    I find it really weird the foreign banks can't just ignore FACTA. – Joshua Jun 27 at 19:05
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    @Joshua they can but if they ever want to do business with any US companies or any close allies, then they should adhere to facta – Reinstate Monica Jun 27 at 19:20
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    Is it FACTA or FATCA? – Shadow Jun 28 at 0:12
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    @Shadow FATCA. (Foreign Account Tax Compliance Act) – Xander Jun 28 at 1:47
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    Is there any requirement for a dual citizen to inform the financial institution that they are a US citizen? – Viktor Jun 28 at 2:17

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