Crypto tax reporting app Binocs helps users navigate regulations • TechCrunch
Keeping up with cryptocurrency tax compliance can be difficult, especially since many laws are new (or haven’t been written yet). That is why Binocs was founded. Users integrate their exchanges and wallets, and Binocs provides a tax report and other accounting details. The startup announced today that it has raised $4 million to expand in markets such as the US, UK 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 over 1,000 users, including retail 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 team for private and institutional investors.
Binocs can deliver a tax report in less than 30 minutes. It also tracks investment returns, profits and losses and capital exchanges, as well as taxes for derivatives, lending and borrowing across CeFi and DeFi. The app can provide users with details of duties and taxes deducted at source already paid on transactions so that they understand how much tax they have to pay.
Binocs founders Tonmoy Shingal and Pankaj Garg
Shingal told TechCrunch that Binocs is intended to be a bridge that connects transactions on the blockchain to the “web2-equivalent compliance world”, especially as the number of coins, exchanges, types of trade and DeFi protocols increase.
There are currently around 300 million crypto users and it is expected to reach around 1 billion by the end of this year.
Binocs’ founders point to figures from Coin Market Cap which state that the total market capitalization of the crypto industry rose from around $325 billion in September 2020 to $1 trillion in September 2022. With a blended tax of around 20%, the total tax liability is around 70 billion dollars, a figure that could increase to 300 billion dollars by 2026.
Shingal, the startup’s CEO, said crypto hedges and investment funds often run with a small number of employees, and the process of calculating taxes and performing compliance is time-consuming because they have to pull data from multiple sources, merge it, and then comply with various compliance and reporting rules for each type of transaction.
“The traditional approach is to collect and interpret the blockchain exchange ledgers manually. Doing something that requires significant time, sophisticated knowledge of crypto transactions, local regulations,” Shingal said. “This task is time-consuming and error-prone, which can be costly.”
He added that regulations are one of the biggest obstacles to more crypto adoption, with around 15 to 20 countries currently taxing crypto investments, and 60 to 70 that will in the future.
Binocs also plans to build more apps on top of its algorithm as it gets more data. “We think of ourselves as a data company that understands what’s happening in crypto transactions and builds applications for more use cases on top of it in the future,” Shingal said.
Binocs is currently pre-revenue, and will make money by operating on a freemium model, as well as a business plan for business investors.
