Crypto Crackdown Bolstered by Winning Foreign Account Playbook

The federal government is racking up wins in cases tied to unreported foreign bank accounts after years of working to track them down, establishing a legal framework that is expected to help the pursuit of cryptocurrency held abroad.

The recent court victories—including a judicial recommendation to repatriate more than $18.2 million—are tied to a requirement that individuals with overseas accounts holding more than $10,000 report them to the government annually.

The penalty for a willful failure to report foreign bank and financial accounts through filings known as “FBARs” is up to 50% of the value of the account’s ...