On the 31st of January 2019, the SEC asked for solutions to help them read and get insights from blockchain transactions. Why? Because blockchain transactions are hard to extract, difficult to read and very challenging to interpret! Which creates opacity for the whole blockchain space. That is why we created our solution for the accounting and compliance of digital assets: Cryptio.
This lack of transparency has been a growing problem for crypto-based companies. For most of them, it is a nightmare just to meet basic needs like finding an accountant, opening a bank account, getting audited and certified compliant. It limits the market development, as “institutions need to see a focus on compliance, transparency, and governance to comfortably use and transact with crypto” said Jeff Horowitz, Chief Compliance Officer at Coinbase in a KPMG report.
What is the technical problem for crypto companies?
Token companies, exchanges, funds and brokers usually have several wallets and exchanges, depending on their purposes. A token company would usually have a trading account on one or several exchanges (not to mention deal with OTC desks) and will use several wallets for its operational activity.
And all these providers will have different format to report transaction history. To just name a few, you’ll have to understand what base and quote currencies are; you’ll have to see that a BUY transaction on Kraken is different from a BUY transaction on Bitfinex, you’ll have to figure out what Bitcoin UTXO are and how to account for them… A full-time job!
Therefore, extracting, consolidating, valuing and classifying all this data (coming from different assets with different prices !) appears to be a nightmare for CFO and CPAs. Bertrand Ducros, CPA at iExec told us:
“Accounting management involving crypto digital assets is essential but so painful today. What can I do if I can’t get easy access to all my transactions? How can I manage my cash flow if I don’t have a clear vision on my future taxes, my stocks, my invoices … ?”
Today companies do it imperfectly in separate spreadsheets.
With Cryptio, we keep track of all your transactions automatically and enrich the data with cost basis, accounting classification, invoice number … We support multiple accounting methods to calculate gains, estimate and optimize asset sales and taxes. No need for clumsy spreadsheets. Everything is automated, accurate and transparent.
Cryptio enables companies to easily meet their compliance obligations by sharing to third parties data about their activity.
Accounting and compliance for digital assets requires knowledge of the technological background. Accountants, bankers, auditors don’t understand how blockchain transactions work and they are not to blame! Imagine an accountant, new in the crypto business, who receives exchanges and Etherscan exports from his client as well as dozens of invoices he is supposed to match with transactions. Where is he supposed to start from?
Julien Mimoun, co-founder and CPA at MR Capital (crypto focused accounting firm) acknowledges that :
“Having collaborated with numerous crypto firms, I have been losing so much time consolidating cross-wallet and exchanges transactions on Excel, converting them in fiat in a rough way with non consistent databases to finally start doing proper accounting. Having a solution collecting my client’s financial data to manage the accounting properly is a must have. ”
With Cryptio, you can easily report your activity to third parties through a powerful and secure solution. Give read-only accesses to the partners who count in your business. And make it grow by meeting all compliance and transparency standards. William O’Rorke, founder at ORWL, a blockchain-focused law firm: :
“In the event of a tax audit of your company, a tool such as cryptio allows you to prove your compliance in a fast and easy way. Moreover, we bet that the tax authorities will soon use the same tools to control returns.”
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