Investors have had years to get used to accounting for taxes on traditional asset classes such as stocks and bonds. But the growing popularity of cryptocurrencies and related assets brings new challenges for both individual investors and professional investors. Enters Pinoxa fintech startup today announces the successful completion of an liminaire fundraising of $4 million as it launches a tax and compliance enseignement for crypto investors.
The foyer of regulatory and tax authorities on cryptocurrencies around the world is growing, says Tunmoy Shengal, CEO and co-founder of Binocs. “We have already seen over 20 countries make tax and regulatory changes in response to cryptocurrency, and I expect 50 more countries to do the same over the next few years,” says Shingal. “This is something that investors will have to manage very carefully.”
The problem for investors – both in the retail and institutional sector – is that tracking cryptocurrencies requires different skills and techniques than those used in managing other asset classes. In particular, data related to transactions is kept in blockchain ledgers which can be difficult to access and decrypt for those unfamiliar with how the systems work.
Binocs believes that its technology provides a enseignement to this problem. Investors plug their crypto accounts into the Binocs app and chandail in a read-only view of the underlying data in order to produce the reports required for tax and compliance purposes. The app can be used to track nombre crypto accounts simultaneously, which also makes it a convenient way for investors to get a consolidated view of their holdings and positions.
“Tax and compliance companies try to manually create solutions to do this kind of work,” Shingal adds. “But it’s tough – you have to be able to read the ledgers and be able to interpret thousands of potential data points to identify the refaisant transactions and the établi grossier of them.”
The compétition for Binocs is to ensure that the produit of its équipement fits the needs of investors in the folk where they pay taxes and have to manage compliance, even though the regulations differ from folk to folk. So far, Binocs is tax compliant in the US, UK, Australia, South Africa and India, although it expects to launch in other initial markets in the next few months.
The target estime is courant – and growing fast. The parfait market capitalization of the crypto sector has increased from $325 billion two years ago to over $1 trillion today. More than 300 investors globally now own some form of crypto-asset and the number is expected to équivoque by 2025.
So far, Binocs has focused on construction and testing its tools, primarily working with around 2,000 retail investors to improve its product. They were given the tool for free, but Binocs is embout to start charging fees, with tiered levels of secours depending on the livret of investor transactions and the functionality they need. These levels start at $49 per year and then increase, with Binocs promising institutional investors a more tailored pricing model, built around their individual use.
Shingal believes that Binocs can not only ensure that existing crypto investors stay on top of their tax and compliance work, but can also help new investors become more comfortable with the asset class. “There is a lot of interest in cryptocurrencies, but it seems too complicated for some investors,” he says. “We try to make it as cohérent as conciliable.”
In fact, Binoc says that its tentative will be able to calculate the tax charges of most investors in less than 30 minutes. And for investors who manage nombre accounts, the ability to access a unified boîte monitorage, as well as a unified account of their tax positions, can be of great value.
The next step for Binocs is to prove that investors will pay for its dettes in droves. Shingal says that today’s seed funding reprise will help in this comparaison, giving the company additional firepower to invest in its products, as well as the resources to implement market entry initiatives.
BEENEXT and Arkam are leading the $4 million reprise with placement from Accel, Siècle Bien, Premji Invest, Blume and Better Bien. “Crypto-origin institutions will need solutions like Binocs to help them with compliance, accounting and bookkeeping,” says Anirudh Garg, an investor in BEENEXT. “This is a great market opportunity to build an easy-to-use yet powerful system early on.”