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Offshore Account Meaning

A bank account or crypto exchange account located in a jurisdiction outside of the user's country of residence. In the crypto world, this term often refers to exchanges registered in tax havens or countries with loose regulations (like the Seychelles, Bahamas, or Cayman Islands) to avoid strict US or EU rules.

Traders often seek offshore accounts to access high-leverage trading (e.g., 100x leverage) or derivatives products that are banned in their home countries. For example, FTX was famously headquartered offshore to offer products to international customers that US regulations prohibited.

While not illegal inherently, using offshore accounts to evade taxes is a crime. Tax authorities worldwide are increasingly cracking down on offshore crypto holdings, using data sharing agreements to identify citizens hiding assets abroad.

The "Wild West" era of offshore crypto is shrinking as global regulations tighten.

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