7 minute read
Does MEXC Report to the IRS? What You Need to Know
from MEXC
by Exness_India
Does MEXC report to the IRS? The short answer: No, as of now, MEXC does not directly report user activity to the IRS. However, that doesn’t mean you’re off the hook when it comes to crypto taxes in the United States.
In this article, we’ll explain what MEXC is, how it fits into IRS regulations, what risks U.S. traders face, and how to stay compliant with U.S. tax laws—even if the exchange isn’t reporting on your behalf.
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What Is MEXC?
MEXC (formerly MXC) is a global cryptocurrency exchange founded in 2018, offering a wide range of crypto assets, spot trading, futures, staking, and more. It’s known for high liquidity, frequent listings of new tokens, and a user-friendly interface.
While MEXC operates globally, it is not headquartered in the United States, and it does not specifically cater to U.S. users. In fact, MEXC’s terms of service prohibit residents of the U.S. and certain other regions from using the platform, in line with international compliance concerns.
Despite this, many U.S.-based traders still use MEXC via VPNs or without disclosing their U.S. residency.
Does MEXC Report to the IRS?
As of the time of writing, MEXC does not have a formal relationship with the IRS and does not issue Form 1099s or other tax forms to U.S. persons. Since MEXC is not a U.S.-based exchange and does not operate under U.S. jurisdiction, it is not required to report user data directly to the IRS.
However, that does not mean U.S. users are exempt from reporting their activity. Here’s what you need to know.
Why You Still Owe Taxes on MEXC Trades
U.S. citizens and residents are taxed on their worldwide income, including gains made on foreign crypto exchanges like MEXC. Whether or not the exchange reports to the IRS, you are still legally required to report your crypto income, gains, and holdings.
Here’s what counts as a taxable event when using MEXC:
Selling crypto for fiat
Trading one crypto for another (e.g., ETH to SOL)
Using crypto to pay for goods or services
Earning staking rewards, bonuses, or airdrops
Even if MEXC doesn’t send you a tax form, the IRS requires you to self-report.
Will MEXC Start Reporting to the IRS in the Future?
Possibly. In recent years, the IRS and U.S. Treasury have increased efforts to close the crypto tax gap. In 2023, the Infrastructure Investment and Jobs Act introduced new requirements for “digital asset brokers” to report user activity via Form 1099-DA, a specialized tax form for crypto transactions.
While these rules primarily apply to U.S.-based exchanges like Coinbase, Kraken, and Binance US, regulators have also signaled they are keeping an eye on offshore exchanges that serve U.S. customers.
It’s possible that in the future:
MEXC could voluntarily begin reporting to remain compliant and attract institutional users.
The U.S. could increase pressure or sanctions on non-compliant foreign exchanges, like it did with Binance.
Payment processors and banks might be required to flag crypto-related transactions going to or from exchanges like MEXC.
Although MEXC doesn’t report now, don’t assume that will always be the case.
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Can the IRS Find Out About My MEXC Account?
Yes—indirectly. There are multiple ways the IRS can discover your activity on offshore exchanges:
1. Bank Records
If you fund your MEXC account from a U.S. bank account or withdraw profits to it, those transfers may show up in your financial records. The IRS can subpoena banks or payment processors during audits.
2. Blockchain Analysis
The IRS partners with blockchain analytics firms like Chainalysis to trace crypto movements. If your MEXC wallet interacts with known wallets or exchanges, that activity can be tracked—even if MEXC itself doesn’t provide user data.
3. KYC & Leaks
MEXC requires identity verification (KYC) for certain features and large withdrawals. If you’ve submitted personal documents, that data could theoretically be shared or leaked. In future regulatory crackdowns, exchanges may be forced to hand over user data.
4. Voluntary Disclosure
If you ever report crypto activity on your taxes (e.g., on Form 8949 or FBAR), you are already alerting the IRS to your involvement with foreign crypto assets.
Bottom line: Just because the IRS isn’t watching MEXC right now doesn’t mean they can’t or won’t in the future.
Do I Need to Report My MEXC Account on FBAR or FATCA?
Yes, if your holdings meet certain thresholds.
FBAR (Foreign Bank Account Report)
If you had more than $10,000 USD in total across all foreign financial accounts (including exchanges like MEXC) at any point during the year, you must file FinCEN Form 114 (FBAR).
FATCA (Form 8938)
If your foreign financial assets (including crypto) exceed certain thresholds ($50,000+ for single filers, $100,000+ for married joint), you may also need to file IRS Form 8938.
While there’s still debate over whether crypto exchanges count as "foreign financial institutions" under these rules, many tax professionals recommend erring on the side of disclosure—especially if the platform holds significant value.
What If I Don’t Report MEXC Activity?
Failing to report your crypto income or foreign accounts can lead to:
Penalties and interest on unpaid taxes
Accuracy-related penalties (20% of underpayment)
Failure-to-file or failure-to-pay fines
Criminal prosecution for willful tax evasion
FBAR penalties of up to $10,000 for non-willful violations or $100,000+ for willful violations
Even if MEXC doesn’t report now, the IRS can audit up to 6 years back (or indefinitely in cases of fraud).
If you’ve failed to report MEXC activity in previous years, consider speaking with a crypto tax attorney about voluntary disclosure options.
How to Stay Compliant With MEXC and the IRS
Here’s a basic checklist to ensure you stay on the right side of U.S. tax law:
Keep Records
Track all deposits, withdrawals, trades, and staking rewards on MEXC.
Use crypto tax software (like Koinly, CoinTracker, or TokenTax) that supports imports from MEXC.
Report Gains and Losses
Use Form 8949 to report crypto trades.
Include totals on Schedule D of your tax return.
Report Income
Staking rewards or bonuses from MEXC are taxable as income at the time of receipt.
Disclose Foreign Accounts (if required)
File FBAR (FinCEN 114) and/or FATCA (Form 8938) if your balances qualify.
Work With a Tax Professional
Especially if you trade actively or deal with large sums, a CPA familiar with crypto can save you from costly mistakes.
Can I Still Use MEXC Legally From the U.S.?
Technically, MEXC’s terms of service prohibit U.S. residents from using the exchange. Accessing MEXC from the U.S. may violate the platform’s policies and could result in your account being frozen or limited.
More importantly, using offshore exchanges to avoid taxes can be considered willful tax evasion—a felony.
If you’re a U.S. taxpayer, you can use MEXC at your own risk, but you are still responsible for full tax compliance.
Final Thoughts: MEXC and the IRS
To recap:
MEXC does not currently report to the IRS.
You are still required to report all MEXC activity on your U.S. tax return.
The IRS has multiple ways to uncover foreign exchange activity, even without direct reporting.
Non-compliance can lead to severe penalties.
If you’re a U.S. trader using MEXC, don’t make the mistake of thinking you’re flying under the radar. Take proactive steps to track, report, and pay taxes on all crypto transactions—regardless of where they happen.
FAQs
Q: Will MEXC send me a 1099 form?
A: No. MEXC does not send 1099s or other IRS forms.
Q: Can I avoid taxes by using MEXC?
A: No. All U.S. taxpayers must report crypto gains, no matter the exchange used.
Q: Is it illegal to use MEXC in the U.S.?
A: It violates MEXC’s terms of service, but not necessarily U.S. law. However, using MEXC to avoid taxes is illegal.
Q: What if I didn’t report past MEXC activity?
A: Speak with a tax professional. You may be able to amend past returns or file through a voluntary disclosure program.
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