Keeping track of cryptocurrency tax compliance can be tricky, especially since many laws are new (or have not yet been written). That’s why Binocs was founded. Users integrate their exchanges and wallets, and Binocs provides a tax report and other accounting data. The startup announced today that it has raised $4 million to expand in markets such as the United States, the United Kingdom 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 more than 1,000 users, including private 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 next month. Part of the funding will be used for product development and Binocs’ go-to-market teams for retail and institutional investors.
Binocs can file a tax return in less than 30 minutes. It also tracks returns on investments, gains and losses, and capital exchanges, as well as taxes on derivatives, loans, and loans in CeFi and DeFi. The app can provide users with details of fees and taxes withheld at source and already paid for transactions so that they understand how much taxes they have to pay.
Shingal told londonbusinessblog.com that Binocs is intended to be a bridge connecting transactions on the blockchain to the “web2 equivalent compliance world,” especially as the number of coins, exchanges, types of trading and DeFi protocols grow.
There are currently about 300 million crypto usersand that is expected to be about 1 billion by the end of this year.
The Binocs founders point to Coin Market Cap figures that say the crypto industry’s total market cap increased from approximately $325 billion in September 2020 to $1 trillion in September 2022. mixed load of about 20%total tax debt is about $70 billion, a number that could reach $300 billion by 2026.
Shingal, the startup’s CEO, said that crypto hedges and investment funds often work with a small number of employees, and that the process of calculating taxes and performing compliance is time-consuming as they have to pull data from multiple sources. merge and then have to adhere to different compliance and reporting rules for each type of transaction.
“The traditional approach is to manually collect and interpret the blockchain exchange ledgers. That requires a lot of time, advanced knowledge about crypto transactions and local regulations,” said Shingal. “This task is time-consuming and error-prone, which can be costly.”
He added that regulation is one of the biggest obstacles to crypto adoption, with about 15 to 20 countries currently taxing crypto investments, and 60 to 70 will do so in the future.
Binocs also plans to build more apps on top of its algorithm as it gains more data. “We see ourselves as a data company that understands what’s going on in crypto transactions and builds applications for it in the future for multiple use cases,” Shingal said.
Binocs is currently pre-revenue and will generate revenue by operating on a freemium model as well as a business plan for corporate investors.