Crypto Binocs Tax Reporting App Helps Users Navigate Regulations TechCrunch
Tracking tax compliance for cryptocurrency can be tricky, especially since many laws are new (or haven’t been written yet). That is why Binocs Was found. Users integrate their exchanges and wallets, and Binocs provides tax reporting and other accounting details. The startup announced today that it has raised $4 million to expand into markets including the US, UK and Australia. The round was led by BEENEXT and Arkam with participation from Accel, Saison Capital, Premji Invest, Blume and Better Capital.
Founded in May 2022 by Tonmoy Shingal and Pankaj Garg and based in Bangalore, Binocs currently has over 1,000 users, including retail and institutional investors who need to perform forensic accounting and risk management. Binocs is currently tax compliant in the US, UK, Australia, South Africa and India, and plans to add more markets next month. A portion of the funding will be used for Binocs’ product development and go-to-market teams for retail and institutional investors.
Binocs can provide a tax report in less than 30 minutes. It also tracks return on investment, profit and loss and capital exchanges, as well as taxes on derivatives, lending and borrowing on CeFi and DeFi. The app can give users details of fees and withholding taxes already paid on transactions so they understand how much tax they have to pay.
Shingal told TechCrunch that Binocs is meant to be a bridge connecting transactions on the blockchain to the “equivalent Web2 compliance world,” especially as the number of DeFi coins, exchanges, trade types and protocols grows. .
There are currently approximately 300 million crypto usersand which is expected to reach around 1 billion by the end of this year.
The founders of Binocs point to coin market cap figures which indicate that the total market capitalization of the crypto industry has grown from around $325 billion in September 2020 to $1 trillion in September 2022. With a mixed tax around 20%the overall tax debt is around $70 billion, a figure that could reach $300 billion by 2026.
Shingal, CEO of the startup, said that crypto hedges and investment funds often operate with a small number of employees, and the tax calculation and compliance process is time-consuming as they have to mine data from multiple sources, merge it and then adhere to different compliance and reporting regulations for each type of transaction.
“The traditional approach is to manually gather and interpret blockchain exchange records. Doing what requires a lot of time, sophisticated knowledge about crypto transactions, local regulations,” Shingal said. “This task is time-consuming and error-prone, which could be costly.”
He added that regulation is one of the biggest obstacles to greater crypto adoption, with around 15-20 countries currently taxing crypto investments, and 60-70 doing so in the future.
Binocs also plans to build more apps on top of its algorithm as it gets more data. “We see ourselves as a data company that understands what’s going on in crypto transactions and is building applications for multiple use cases in the future,” Shingal said.
Binocs is currently in pre-revenue and will monetize by operating on a freemium model, as well as a business plan for commercial investors.