Cryptocurrency tax reporting was a controversial topic in the US last year when Congress passed the Infrastructure Investment and Jobs Act.
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Cryptocurrency portfolio tracker and tax calculator CoinTracker has achieved “unicorn” status after raising $100 million in Series A funding, proving once again that investors is allocating a large amount of capital to crypto-focused companies.
The Series A investment round was led by California-based venture capital firm Accel, with additional participation from General Catalyst, Initialized Capital, Y Combinator Continuity, 776 Ventures, Coinbase Ventures, Intuit Ventures and Kraken Ventures. Individual investors participating in the round include former Stripe COO Hughes Johnson, Coinbase board member, Gokul Rajaram, and Jeremy Liew, an early investor in Affirm and Snapchat.
With the fundraising, CoinTracker’s total value has grown to $1.3 billion, making it the latest unicorn to take the throne in the crypto industry. In the startup world, unicorns are companies that have achieved a valuation of at least $1 billion.
CoinTracker said it will use the funds to meet the growing demand for sophisticated tax reporting tools in the crypto industry. It will also expand human resources and expand the scope of operations of exchanges, chains and wallets. The company says it has over 500,000 users and tracks over $20 billion worth of crypto assets across 25 blockchains and over 300 exchanges. Its user count has increased 5 times since April 2020 when it first accumulated 100,000 users.
The new US infrastructure bill has been signed by President Biden. The bill imposes restrictions on businesses that handle cryptocurrencies, and mandated digital asset transactions worth more than $10,000 to be reported to the IRS. https://t.co/gxdeK2LVJa
– Cointelegraph (@Cointelegraph) November 16, 2021
When asked about the biggest issues crypto holders face regarding tax compliance, Jon Lerner, co-founder and CEO of CoinTracker, told Cointelegraph that tracking transactions on Many exchanges lead to challenges in calculating taxes correctly. “Complexity is exploding,” he said, explaining:
“Calculating capital gains or losses can be difficult, especially considering it can be redeemed from multiple places and moved across exchanges and wallets over time. To make matters worse, users are increasingly using cryptocurrencies across more exchanges, decentralized tools and chains, as well as use cases such as store of value, DeFi, NFT, payments, etc. The complexity is exploding”.
As Cointelegraph reported, CoinTracker’s platform became available to users of Coinbase, one of the world’s leading digital asset exchanges, in January 2021, just in time for the Internal Revenue Service (IRS). calls for this exchange to take a stronger position on tax evasion. CoinTracker’s platform allows users to report transactions and sell thousands of cryptocurrencies in a more accessible way.
Cryptocurrencies are once again on the radar of the IRS and federal regulators with the passage of the Infrastructure Investment and Jobs Act in November 2021. The new law is expected to create $28 billion in tax revenue from the crypto industry over the next ten years due to changes in how regulators classify brokers, as well as other reporting requirements.
Related: Cryptocurrency Heavy Returns to Inflation-Fighting Savings Protocol
Regarding venture capital’s continued interest in the crypto space amid the recent bear market, Lerner said that “most of the top-level tech investors have realized that the industry Cryptocurrency is here to stay, with its huge potential and upside potential.” These investors don’t let volatility influence their investment decisions because they focus on companies with solid fundamentals.