Investor enthusiasm for crypto rose in the past decade, but many people reportedly still don’t have a good grasp on how to buy and sell it or how to handle accounting for tax purposes.
A State Street survey found that 81% of institutional investment leaders and managers will increase or start their investment in crypto in the next three years, and 56% believe crypto will be considered just another asset class in that time period.
The increased interest has prompted the IRS to more closely monitor capital gains and losses, although a January date for crypto brokers and exchanges to start tracking data is likely to be delayed.
But even with the delay, brokers and exchanges must be prepared to deal with the tax implications resulting from crypto investments. That’s where companies like Ledgible may come in.
Ledgible, which handles post-trade read-only data for crypto currencies like Bitcoin BTC/USD and Ethereum (CRYPTO: ETH),partners with enterprises, professionals, and institutions to aggregate, normalize and make crypto data legible for traditional tax and accounting.
Bridging The Accounting Gap?
The company recently teamed up with FIS to look to help clients navigate the bridge between traditional and digital assets. Ledgible says the partnership is expected to deliver innovative technology solutions and services, marking a shift in institutions’ ability to manage crypto and digital assets in their portfolios.
FIS is one of the largest providers of traditional banking, capital markets and payment technology and supports four of the top five crypto exchanges. The company says there are challenges to adopting cryptocurrency but believes that a big part of the marketplace will eventually be conducted on blockchain, which is why it aligns with partners like Ledgible which specialize in crypto tax and accounting software.
Ledgible also recently announced $20 million in funding for its Series A round, arguably marking a milestone in the professional tax base that underscores the need for and importance of cryptocurrency support in the industry.
The company says the investment will be used to expand its two core business lines — professional tax and enterprise accounting, including further expansion to support its growing number of institutional partners and accounting firms.
The company’s tax practice focuses on the professional market — accounting firms, certified public accountants, tax advisers and, by proxy, consumers that use these services.
Ledgible’s accounting practice serves mining companies, companies that hold crypto and banks and institutions that handle crypto.
“For any individuals, institutions or enterprises that hold or deal with crypto assets, the ability to properly account for them and realize the appropriate gain and loss for tax and accounting purposes is essential,” Ledgible CEO Kell Canty said at the time the funding was announced. “At Ledgible, we provide the platform to bridge the gap between digital assets and traditional finance.”
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