Over 300 million people around the world have crypto assets in their investment portfolio, a number that is set to double by 2025. Helping them stay on top of their regulatory responsibilities, crypto tax reporting app Binocs has announced a $4M fundraise.
With this new funding round, they plan to also cater to institutional crypto investors and enter geographies like the US, UK, and Australia. The seed funding 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, Binocs helps retail crypto investors to adapt and evolve to the ever-changing dynamics of the crypto market by simplifying their accounting, taxation, compliance proceduress, and helping them stay on top of their portfolios.
The app is able to compute crypto taxes in less than 30 minutes and already has over 1,000 active users. Binocs also offers portfolio tracking features allowing users to get an overview for their entire distributed crypto portfolio which offers a consolidated report on ROI, P&L, and capital gains across all exchanges. This includes a wide range of cryptocurrencies, tokens, protocols, and smart contracts.
Co-Founder and CEO Shingal explained further: “Compliance related to crypto trades and investments can be tricky, error-prone and time-consuming. Binocs is mitigating these pain points for retail users and institutions to have a seamless crypto experience. Moreover, the lack of information around crypto tax regulations is a hurdle to investing in the asset class. Using state-of-the-art technology, we ease the crypto taxation journey of our users. In essence crypto is a Web3 currency but has to comply with a Web2 world of accounting principles and compliance. We are bridging this gap. Our software is compliant with the latest regulations, ensuring our users can calculate their taxes efficiently.”
The total market cap of the crypto industry has risen sharply from ~325 USD billions in September 2020 to around a trillion dollars in September 2022. Assuming equal split between short term and long-term capital gains in the numbers above and a blended tax rate of ~20% the overall tax liability it imposes on investors is of the tune of approx US$70bn. By 2026 this tax outlay corpus could reach around $300bn ( assuming 20% user growth and 15% asset price growth annually).
Such portfolio aggregation and technology can be expanded to include new use cases in future like building financial identity for retail users to forensics and risk management for institutional investors. The market is huge and is rapidly growing.
Binocs in a nutshell
The primary purpose of Binocs is to ensure accurate tax computation is executed while maintaining compliance with the latest local laws and regulations for all its users. Binocs caters to an array of transactions right from Buy / Sell trades, Staking, P2P transactions, Airdrops and even transactions across wallets.
The firm has recently launched features to track complex trades like derivatives, lending & borrowing across CeFi and DeFi (like AAVE-v2 and more) platforms which sets them apart from the rest. With complete transparency, the algorithm breaks down the transaction fee and TDS already paid on the transactions and then calculates tax on the net amount.
Users can link their crypto portfolios via multiple sources like centralised exchanges, decentralised exchanges, wallets, and on chains directly. They can track daily portfolio movements and portfolio value (enabled by intelligent analytics), as well as download quarterly and annual tax computation and account statements. Binocs also reconciles transactions, since inception, from multiple accounts with zero errors. Binocs is tax compliant in the US, UK, Australia, South Africa, and also India. Other major markets will be added in the coming month, the company said.
This funding round will help Binocs to launch in countries where tax regulations are defined and expand the team.
Anirudh Garg, an investor at BEENEXT, explained: “As the Web3 world grows, crypto native organisations will need solutions like Binocs to help them with their compliance, accounting and bookkeeping. Twenty countries currently have tax regulations and compliance in place for cryptocurrency and there are another 50 that will implement such policies in the near future. This is a great market opportunity to build an easy-to-use, yet powerful, system early on.”