Direct answer
In general, US citizens can hold accounts with foreign forex providers, but whether it is “legal” in a specific year (like 2016) depends on the country’s and the account holder’s obligations—especially rules about reporting, recordkeeping, and how the account is structured and used. Because this is jurisdiction- and circumstance-dependent, you cannot confirm legality for a particular person in 2016 without checking the relevant legal requirements at the time.
How it works (core concepts)
A “foreign forex account” typically means an account used to trade or hold positions related to foreign exchange with an institution outside the US. The legality question usually breaks into two layers:
-
Permission and account access rules: Some providers may accept or restrict clients based on nationality, residency, and documentation. Separately, US-facing requirements can limit how accounts are opened or how they are used.
-
Compliance and disclosures: Even if opening and using a foreign account is permitted, there may be ongoing duties such as reporting foreign financial accounts, declaring account ownership, and keeping adequate records. These duties can apply regardless of trading activity.
In practice, “legal” usually means: you complied with the relevant requirements for account ownership, reporting, and any registration or disclosure obligations that apply to you and your account.
Example checks you can do independently
To evaluate your situation for 2016 (without assuming outcomes), you can:
- Identify the account details: ownership type (individual vs. joint), where the institution is located, and whether it is a brokerage, bank-style account, or something else.
- Verify the applicable obligations for that year: look up the official guidance that covers US citizens holding foreign financial accounts and related reporting duties during 2016.
- Match the guidance to your facts: check whether the rules rely on account ownership, maximum balances, transaction activity, or other triggers.
- Confirm provider-side requirements: review the provider’s terms for account eligibility for US citizens and the documentation they required for onboarding.
If you need a definitive legal answer for your exact case, using official sources and, when appropriate, a qualified professional is the most reliable approach.
Limitations and uncertainty
This explanation is general and not a determination of what is legal for any specific person. It avoids jurisdiction-specific, time-sensitive details because those rules and interpretations can change and depend on facts such as residency, account ownership, and account type. Therefore, you should treat this as education on how the question is typically evaluated, not as a confirmation of compliance for 2016.