Maintaining tax compliance for cryptocurrencies can be difficult, especially since many laws are new (or not yet written). for this Binox was established. Users integrate their exchanges and wallets and Binok provides a tax report and other accounting details. The startup announced today that it has raised $4 million to expand into markets like 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 Tanmoy Shingal and Pankaj Garg and based in Bengaluru, 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, with plans to add more markets in the coming months. A portion of the funds will go towards product development and marketing Binox to retail and institutional investors.
Binocs can provide tax reports in less than 30 minutes. It tracks returns on investments, gains and losses and capital exchanges, as well as taxes on derivatives, lending and borrowing across CeFi and DeFi. The app can also provide details of the fees and taxes already paid at source on the transaction to the users so that 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 a “web2 equivalent consensus world”, especially due to the growing number of coins, exchanges, trade types and DeFi protocols.
Currently in a relationship 300 million crypto usersAnd it is expected to hit around 1 billion by the end of this year.
The founders of Binocs point to statistics from Coin Market Cap that say the total market value of the crypto industry has grown from around $325 billion in September 2020 to $1 trillion in September 2022. Mix about 20%The overall tax liability is about $70 billion, a figure that could rise to $300 billion by 2026.
Shingle, the startup’s CEO, said crypto hedges and investment funds often run with a small number of staff, and the process of performing tax calculations and compliance is time-consuming because they have to bring in data from multiple sources, consolidate it and then comply. Different compliance and reporting regulations for each type of transaction.
“The traditional approach is to manually collate and interpret blockchain exchange ledgers. Which requires significant time to do, sophisticated knowledge of crypto transactions, local regulations,” said Shingle. “This work is time-consuming and error-prone, which can be costly.”
He added that regulations are one of the biggest barriers to crypto adoption, with around 15 to 20 countries currently taxing crypto investments, and 60 to 70 in the future.
Binocs plans to build more apps on top of its algorithm as it gets more data. “We think of ourselves as a data company that understands what’s happening in crypto transactions and will build applications for multiple use cases in the future,” Shingal said.
Binocs is currently pre-revenue, and will operate on a freemium model as well as monetize through an enterprise plan for business investors.