How Binocs Promises to Help Keep Crypto Investors Out of Trouble

Investors have had years to get used to accounting for tax on traditional asset classes such as stocks and bonds. But the soaring popularity of cryptocurrencies and related assets brings new challenges for both private and professional investors. Enter Binocs, a fintech startup that today announces the successful completion of a $4 million seed round as it launches a tax and compliance solution for crypto investors.

The focus of regulatory and tax authorities on crypto is growing worldwide, claims Tonmoy Shingal, CEO and co-founder of Binocs. “We’ve already seen more than 20 countries make tax and regulatory changes in response to crypto, and I expect another 50 to do the same over the next few years,” says Shingal. “This is something investors need to handle very carefully.”

The problem for investors – both in the retail and institutional space – is that tracking crypto requires different skills and technologies than those used in the management of other asset classes. In particular, data about transactions is stored in blockchain ledgers which can be difficult to access and decipher for those who are not familiar with how the systems work.

Binocs believes its technology provides a solution to this problem. Investors connect their crypto accounts to Binoc’s app, and it pulls in a read-only view of the underlying data to produce the reports required for tax and compliance purposes. The app can be used to track multiple crypto accounts simultaneously, which also makes it a convenient way for investors to get a unified view of their holdings and positions.

“Tax and compliance firms try to manually build solutions to do this kind of work,” adds Shingal. “But it’s hard – you have to be able to read the ledger and be able to interpret potentially thousands of data points to identify relevant transactions and the exact nature of them.”

The challenge for Binocs is to ensure that the results of the tools suit the needs of investors in the country where they pay taxes and have to deal with compliance, even if the systems vary from country to country. So far, Binocs is tax compliant in the US, UK, Australia, South Africa and India, although it expects to launch in other major markets in the coming months.

The target group is global – and growing rapidly. The total market capitalization of the crypto sector has increased from $325 billion two years ago to more than $1 trillion today. More than 300 investors globally now hold some form of crypto-asset, and the number is expected to double by 2025.

So far, Binocs has focused on building out and testing its tools, working primarily with around 2,000 retail investors to fine-tune the product. They’ve got the tool for free, but Binocs is about to start charging, with tiered service levels depending on investors’ transaction volume and the functionality they need. These tiers start at $49 a year and increase thereafter, with Binoc promising institutional investors a more tailored pricing model, built around their individual use.

Shingal believes that Binocs can not only ensure that existing crypto investors stay on top of tax and compliance work, but that it can also help new investors become more comfortable with the asset class. “There is a lot of interest in crypto, but it feels very complex to some investors,” he says. – We try to make it as simple as possible.

In fact, Binoc says its app will be able to calculate most investors’ tax liabilities in less than 30 minutes. And for investors who run multiple accounts, the ability to access unified portfolio monitoring, as well as a consolidated account of their tax positions, can prove very valuable.

The next step for Binocs is to prove that investors will pay for the service in large numbers. Shingal says today’s seed funding round will help in this regard, giving the business additional firepower to invest in its products, as well as resources to put into marketing initiatives.

The $4 million round is led by BEENEXT and Arkam, with participation from Accel, Saison Capital, Premji Invest, Blume and Better Capital. “Crypto-native organizations will need solutions like Binocs to help them with their compliance, accounting and bookkeeping,” says Anirudh Garg, an investor at BEENEXT. “This is a great market opportunity to build an easy-to-use yet powerful system early.”