Crypto tax reporting app Binocs announced it has raised $4 million to help crypto investors stay on top of their tax responsibilities.
The seed round was co-led by Beenext and Arkam, according to a release on Thursday. Other investors include Accel, Saison Capital and Better Capital.
Founded in May by Tonmoy Shingal and Pankaj Garg, Binocs aims to help crypto investors manage their tax responsibilities. The company said in the release it can compute crypto taxes in less 30 minutes and has over 1,000 customers.
“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,” Shingal, Binoc's CEO, said in the release. “Our software is compliant with the latest regulations, ensuring our users can calculate their taxes efficiently.”
The market opportunity is huge
The market for crypto tax is huge, according to Binocs. It estimates the overall tax liability that could be imposed on investors is around $70 billion based on equal split between short-term and long-term capital gains from crypto’s total market cap and a blended tax rate of around 20%.
Binocs' platform enables tax computation while adhering to local regulation and laws, per the release. It covers a range of transactions from traditional buy and sell trades to staking and airdrops.
“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,” the release said.
Binocs can link to user’s crypto wallets and exchange accounts enabling individuals to track their overall portfolio value and download quarterly and annual tax statements, according to the release.
The rise of back-office functions
The startup is tax compliant in the U.S., UK, Australia, South Africa and India and is targeting other markets in the coming months. The funding round will help Binocs launch in these additional markets and expand to catering to institutional crypto investors.
“20 countries currently have tax regulations and compliances in place for cryptocurrency and there are another 50 that will implement such policies in the near future,” said Anirudh Garg, investor at Beenext, in the release. “This is a great market opportunity to build an easy-to-use, yet powerful, system early on.”
Binocs is just one of many web3 back-office platforms to announce a seed round raise in recent days. Financial operations platform raised $5 million to help crypto companies manage working capital across custodial and non-custodial wallets, while web3 accounting tool Tres raised $7.6 million to improve the accounting process for web3 firms.
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