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Crypto Tax Accounting Software Provider TaxBit Raises $130M From Investors

Amidst the geared up to move by investors to back innovative projects in the blockchain ecosystem, crypto tax accounting software provider, TaxBit has raised $130 million from investors.

According to the official announcement, this round funding was preceded by a $100 million capital back in January led by IVP and Insight Partners. Other angel investors, including FTX Derivatives founder and CEO, Sam Bankman-Fried also joined in the round.

Investors are particularly optimistic about TaxBit’s proposed solutions to help all crypto stakeholders profile their tax liabilities accurately and efficiently. The firm’s software is not only beneficial for crypto investors, but it is also a vital tool for regulators to provide the proper oversight for the industry.

FTX CEO Sam Bankman-Fried said:

“FTX US is excited to partner with TaxBit in bringing a world-class tax experience directly to our platform. FTX US users will have access to portfolio performance statements, tax optimisation tools, and year-end tax forms that make it easy for users to report and file their taxes. TaxBit’s technology supports FTX’s commitment to compliance while focusing on the customer experience,”

American tax regulators and authorities worldwide are continually exploring avenues to promote tax compliance amongst crypto investors or traders alike. The South Korean tax watchdogs are looking to bring compliance on a 20% capital gains tax on crypto proceeds.

TaxBit develops this tool will help aid proper monitoring and compliance for both investors and regulators alike. However, according to the firm, the new funding will be deployed to bolster its workforce and power its expansions in the United States and the UK.

“TaxBit will use the funds to scale its multi-channel ecosystem of tax and accounting offerings across the enterprise, consumer, and government sectors. The company plans to double headcount by the end of the year and continue to open new offices in the USA and UK to fuel international expansion,” the shared press release reads.

Crypto Tax Accounting Firm TaxBit Receives Strategic Investment from Haun Ventures

TaxBit, a Salt Lake City, Utah-based provider of crypto tax and accounting software, announced on Tuesday that it has received a new investment from Haun Ventures – a new venture fund designed to help founders build the next generation of the internet.

The strategic investment will allow TaxBit to further accelerate its leading tax and accounting platform and bring additional solutions to the crypto market, helping clients and businesses report and pay crypto taxes.

This is one of the first investments by Haun Ventures, a venture capital fund recently founded by Katie Haun.

Ms. Haun co-led Andreessen Horowitz’s crypto arm in the past, but announced her departure in December last year. In March, Haun launched her venture capital firm, Haun Ventures, which is dedicated to backing crypto startups. The venture capital company was launched with $1.5 billion in capital across two funds — a $500 million early-stage fund and a $1 billion “acceleration” fund.

Besides providing investments to TaxBit, Haun Ventures stated that it has selected a world-class team of crypto-native experts and veteran policy and strategy operators who will collaborate with TaxBit to tell key audiences about how the tax and accounting infrastructure facilitates the growth of the crypto economy.

Katie Haun, the founder of Haun Ventures, talked about the partnership and said: “The web3 ecosystem has grown dramatically since I entered the space and yet we are still in early days. While the crypto economy will continue to unfold in cycles, there is now broad acceptance that this industry is here to stay. TaxBit provides the core infrastructure that is required for the crypto economy to grow and reach its full potential. In addition to the vital role the product plays in the broader ecosystem, the team at TaxBit is best-in-class which is why we’re proud to formally back the company and partner with them over the long term.”

Austin Woodward, TaxBit Founder and CEO, also commented on the development and stated: “The Haun Ventures team shares TaxBit’s vision of working with regulators to propel responsible regulation that enables digital asset adoption at scale. TaxBit’s compliance infrastructure is a critical component to the Web3 ecosystem. We have a deep respect for the Haun Ventures team and look forward to working together in carrying out our shared vision.”

Navigating Crypto Tax Reporting

In August last year, TaxBit raised $130 million in a Series B funding round co-led by IVP and Insight Partners. Other investors, including Tiger Global, Paradigm, 9Yards Capital, Sapphire Ventures, Madrona Venture Group and Anthony Pompliano, also participated in the funding round.

The funding came a few months after TaxBit raised a $100 million Series A in March last year. The latest financing officially made TaxBit a unicorn, with a valuation of $1.33 billion.

The digital economy’s need for tax and accounting software is rising in the industry as regulators require more formal reporting practices. As a result, TaxBit has witnessed impressive growth. In 2020, the firm issued over two million tax forms.

Since the last funding raise, TaxBit has tripled its number of employees to about 100 people. The company has also established an office in Seattle, deployed services with the IRS, and created partnerships with a number of digital asset platforms including Coinbase, BlockFi and Gemini.

Cash App Integrates TaxBit for Streamlined Crypto Tax Reporting

Cash App, a mobile payments processor, has integrated tax and accounting software provider TaxBit into its platform to streamline the tax reporting process for Bitcoin users. The integration, which was announced by both companies, allows Cash App users to track their Bitcoin transactions for tax purposes using TaxBit’s platform. TaxBit’s chief operating officer, Lindsey Argalas, stated that their platform simplifies tax reporting for anyone who has integrated digital assets into their investment portfolio.

Cash App launched its Bitcoin trading services in 2018 and introduced BTC deposits the following year. As of now, the company boasts over 10 million Bitcoin users. Its parent company, Block Inc., has generated billions of dollars in Bitcoin revenue over the years. Block Inc. reported $1.96 billion in Bitcoin revenue during the fourth quarter of 2021, according to United States Securities and Exchange filings.

TaxBit, on the other hand, launched TaxBit Network in 2022, which provides crypto traders free tax forms. The industry consortium was launched with over a dozen U.S.-based companies, including PayPal, Coinbase, Binance.US, Paxos, and Gemini. The aim of TaxBit Network is to simplify tax reporting for cryptocurrency traders and investors.

The Internal Revenue Service (IRS) of Washington has set January 23 as the start of the 2022 tax filing season, giving most taxpayers until April 18 to file and pay their taxes owed. In January, the IRS reminded taxpayers of their crypto income reporting obligations, including capital gains from trading, mining, and staking activities.

The integration of TaxBit into Cash App’s services comes as more companies are exploring the potential of cryptocurrency and blockchain technology. As the popularity of digital assets continues to grow, regulators and tax authorities are paying closer attention to the tax implications of crypto investments. Platforms like TaxBit can help investors and traders stay on top of their tax obligations and avoid any potential legal issues.

In conclusion, the integration of TaxBit into Cash App’s services is a positive step for the cryptocurrency industry. It provides a more efficient and streamlined way for Bitcoin users to manage their tax obligations. As the industry continues to evolve, we can expect to see more developments aimed at making crypto investments more accessible and easier to manage.