Crypto tax calculator CoinTracker is valued at $1.3 billion after a $100 million increase
Cryptocurrency portfolio tracker and tax calculator CoinTracker has achieved “unicorn” status after raising $100 million in Series A funding, once again demonstrating that investors are allocating vast sums of capital to crypto-focused companies.
The Series A investment round was led by California-based venture capital firm Accel, with additional participation from General Catalyst, Initialized Capital, Y Combinator Continuity, 776 Ventures, Coinbase Ventures, Intuit Ventures and Kraken Ventures. Individual investors who participated in the round included former Stripe COO Hughes Johnson, Coinbase board member Gokul Rajaram and Jeremy Liew, an early Affirm and Snapchat investor. .
With the capital raise, CoinTracker’s total valuation rose to $1.3 billion, making it the latest unicorn to be crowned in the crypto industry. In the startup world, unicorns are companies that have reached a valuation of at least $1 billion.
CoinTracker said it would use the funds to meet the growing demand for complex tax reporting tools within the crypto industry. It will also develop its human resources and expand its coverage of exchanges, chains and wallets. The company claims it has over 500,000 users and tracks over $20 billion in crypto assets across 25 blockchains and over 300 exchanges. Its user count has quintupled since April 2020, when it first amassed 100,000 users.
The new US infrastructure bill has been signed by President Biden. The bill imposed restrictions on companies handling cryptocurrencies and mandatory digital asset transactions worth more than $10,000 must be reported to the IRS. https://t.co/gxdeK2LVJa
— Cointelegraph (@Cointelegraph) November 16, 2021
When asked about the main issues facing crypto holders when it comes to tax compliance, CoinTracker co-founder and CEO Jon Lerner told Cointelegraph that tracking transactions across multiple exchanges makes it difficult to accurately calculate taxes. “Complexity is exploding,” he said, explaining:
“Calculating this capital gain or loss can be difficult, especially since it could have been acquired from various places and transferred across exchanges and wallets over time. To make matters worse, users are increasingly using cryptocurrency on more exchanges, decentralized tools and chains, as well as use cases such as store of value, DeFi, NFTs, payments etc. Complexity explodes.
As Cointelegraph reported, CoinTracker’s platform became available to users of Coinbase, one of the world’s leading digital asset exchanges, in January 2021, around the time the Internal Revenue Service (IRS) called on the exchange to take a stronger stance on tax evasion. CoinTracker’s platform allows users to report the transaction and sale of thousands of cryptocurrencies in a more accessible way.
Crypto was once again in the crosshairs of the IRS and federal regulators with the who passed of the Infrastructure Investment and Jobs Act in November 2021. The new law is expected to generate $28 billion in tax revenue from the crypto industry over the next ten years due to changes in how regulators classify jobs. brokers, as well as other reporting requirements.
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Regarding venture capital’s continued interest in the crypto space amid the recent market downtrend, Lerner said that “most top-tier tech investors have recognized that the cryptocurrency is here to stay, given its huge potential and benefits.” These investors don’t let volatility influence their investment decisions, as they focus on companies with strong fundamentals.