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Breaking Down Blox – A Crypto Tracking,  Management, and Accounting Platform.

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We would like to begin by giving thanks to our amazing users, community members, clients, ambassadors and the entire Team Blox that have supported our mission and vision. Without these teams of people, we would not have had the opportunity to build this amazing product for millions of people and thousands of businesses around the world.

 

Blox provides its customers with value-driven services that allow financial teams, accountants and CFOs to have a clear view into their crypto portfolio. Businesses can save on time, money and resources by alleviating the strains of crypto accounting.

 

By keeping all your assets connected in one location, professionals can make better-informed decisions, collaboration is streamlined and reduces exposure to human error or unwanted manipulation. More importantly, Blox keeps your information private and secure with a read-only approach to safeguard your financial privacy.

 

Before continuing further, it’s important to address and identify the industry challenges that emerged and the origins of Blox.io.

 

Identifying the Industry Challenge

Billions of dollars’ worth of crypto transactions take place every year in the crypto universe, and that number continues to rise. That translates to millions of transactions across hundreds of exchanges, tokens, and wallets. The current government classification of cryptocurrencies has no legal framework set in place, only basic guidelines.

 

Therefore, it’s imperative to ensure that proactive and deliberate steps are prepared for any crypto company. Moreover, many CFOs, accountants, and finance teams remain unaware of how to navigate crypto accounting, nor are they aware of available tools for tracking, managing, and bookkeeping of crypto portfolios. The sheer complexity of the accounting process for crypto is an overwhelming task, but with the right solution it can be made easy.

 

  • Hundreds of crypto exchanges, tokens, and wallets to organize and manage.
  • No official government or legal framework, only simple guidelines.
  • Crypto accounting, bookkeeping, management and tracking is uniquely complex.
  • CFOs, accountants, finance teams and decision makers are unaware of available tools and solutions.
  • Current industry solutions are minimal, with most companies relying on outdated spreadsheets with manual data entry and tracking.

 

Solving With A Smarter Solution

 

Blox provides its customers with value-driven services that allow financial teams, accountants and CFOs to have a clear view into their crypto portfolio. Businesses can save on time, money and resources by alleviating the strains of crypto accounting.

 

By keeping all your assets connected in one location, professionals can make better informed decisions, collaboration is streamlined and reduces exposure to human error or unwanted manipulation. More importantly, Blox keeps your information private and secure with a read-only approach to safeguard your financial privacy.

 

But, Blox is far more than just a way to avoid using spreadsheets. When businesses use Blox to manage their personal financial information and extremely valuable assets – security is one of the most important considerations. Feel free to read on or click this link here to learn more about security from Blox.

Our software-as-a-service is one of the most effective and accurate platforms leveraging intelligent automation to alleviate the complexities of crypto accounting and bookkeeping. When reconciling accounts, calculating cost basis or organizing transactions – smarter and more automatic solutions streamline the operational workflow for any crypto business in need of financial tools and features for tracking managing their crypto assets.

While most competitors have one thing they do well or specifically focus on. Blox firmly believes in being a flexible and robust platform built for anyone and any business. 

 

Blox lets you

 

  • Focus on your core business to save costs and time instead of building in-house solutions.
  • Professionals and finance teams can make better-informed decisions, and stay connected with their crypto assets.   
  • Reduce exposure to human error and potential fraudulent manipulation by eliminating the need for spreadsheets for tracking and managing assets.
  •  Always et a clear view into your balances, gains, losses and transaction details with unparalleled accuracy.
  • Automated solutions that improve the operation workflow and boost business productivity efficiency for professionals, CPAs and bookkeepers.

 

Intelligent Tools Solving Real-World Challenges

 

Blox offers an array of features to help organize, manage and integrate crypto accounts and transactions. Our robust and secure platform was built with our users every need in mind.

 

Blox for Accountants & Bookkeepers

 

Take advantage of features to solve day-to-day challenges when tracking, managing and accounting for crypto assets. We have features built specifically to solve their unique requirements.

 

  • Accounts & Transactions – Our platform offers the ability to label and classify transactions to improve the organization and allocation of assets, with options for multiple portfolios and accounts. Custom design transaction classifications to match your Chart of Accounts, with our new Tx Table. Finance teams now have a more organized approach for faster search and discovery of all your crypto transactions.
 
  • CSV Export/Import – Easily export your financial information into a CSV for easy viewing, reporting, or to upload into your general ledger or bookkeeping software. Blox is also introducing importing from other exchanges and GL’s into the platform.
 
  • Audit Trail – Blox simplifies the ability to backtrack the movement of transactions to allow finance teams to discover errors, prevent fraud, track asset movement and generate required financial reports. Blox aggregates your data and even offers the ability to attach supporting documents for accounts, transactions and reports.
 
  • Security & Privacy – Blox is armed with smart security features to ensure your private information stays private. The platform is enabled with Touch ID, distributed admin privileges, and read-only access to provide a one-way window into your crypto accounts. Blox also offers custom security solutions for select customers.
 
  • Real-Time Collaboration – Enable your teams with the ability to collaborate, share projects, and complete reports in real time. Share your portfolio with C-level executives, CPAs, auditors, and more, with enhanced permission controls for authorized access. Let your teams work smarter not harder.

 

Blox for Professionals

 

We know it’s difficult to track crypto assets and our platform makes it easy to sync wallets, exchange accounts, and account balances, to view your entire crypto portfolio in one beautiful dashboard. Individuals and professionals comprise a large part of our user base, so we want to always ensure they get the best tools and event better value from our product.

 

  • Auto-Sync –  Seamlessly sync the top blockchains, exchanges, and wallets – all in one easy-to-use platform. Blox’s proprietary API technology automatically aggregates and syncs user data to offer unparalleled accounting, bookkeeping and financial reporting tools to help businesses and professionals maintain their company’s crypto financials.
 
  • Dashboard – Our stunningly simple user dashboard lets you view your account balances, analytics, transactions and reports in real-time. The intuitive dashboard consolidates all the features and components of Blox, giving users and finance teams access to smarter ways to stay connected with your crypto accounts anywhere and anytime.
 
  • Daily Balance Overview – Blox provides a complete overview with detailed daily snapshots of account balances and transaction activity, providing simplicity for finance teams and professionals. Users can take advantage of specific filtering options to narrow down results across all your wallets, accounts and exchanges. View your their complete financial picture for an up-to-date, and accurate view into your crypto assets.
 
  • Cross-Platform Access – Login to Blox on the web or via the Blox mobile app, making it easier for users to access account balances, transactions, reports and more from your laptop or smartphone. Never lose touch with your accounts with our cross-platform access and compatibility (iOS, Android).
 
  • Security & Privacy – Blox is armed with smart security features to ensure your private information stays private. The platform is enabled with Touch ID, distributed admin privileges, and read-only access to provide a one-way window into your crypto accounts. Blox also offers custom security solutions for select customers.
 

Blox for C-Suite

 

C-Suite professionals are always looking for new ways to solve challenges with the right solutions. But, they don’t have the time and may not have the resources to know what is readily available to them.


Automated, accurate and secure, they can now empower their finance and accounting teams with an all-in-one platform 

 

  • A visual dashboard – View your account balances, analytics, transactions and reports in real-time. The intuitive dashboard consolidates all the features and components of Blox, giving you access to smarter ways to stay connected with your crypto accounts anywhere and anytime. 
 
  • Complete privacy and security – Blox is armed with smart security features to ensure your private information stays private. The platform is enabled with Touch ID, distributed admin privileges, and read-only access to provide a one-way window into your crypto accounts. Blox also offers custom security solutions for select customers.
 
  • Account for every transaction – Our platform offers the ability to label and classify transactions to improve the organization and allocation of assets, with options for multiple portfolios and accounts. Custom design transaction classifications to match your Chart of Accounts, with our new Tx Table. Finance teams now have a more organized approach for faster search and discovery of all your crypto transactions. 
 
  • Anytime and anywhere – Login to Blox on the web or via the Blox mobile app, making it easier for you to access account balances, transactions, reports and more from your laptop or smartphone. Never lose touch with your accounts with our cross-platform access and compatibility.
 
  • Collaborate in real time – Enable your teams with the ability to collaborate, share projects, and complete reports in real time. Share your portfolio with C-level executives, CPAs, auditors, and more, with enhanced permission controls for authorized access. Let your teams work smarter not harder.
 
 

 

 

Crypto Management & Accounting for Crypto Miners - By Blox.io

 

Blox for Crypto Miners

 

The Blox platform is the all-in-one platform providing intuitive features to support the unique tracking, management and accounting needs of today’s crypto mining companies and operations. Crypto mining requires a similar set of services as other crypto companies such as, calculating cost basis, snapshots of daily balances, tracking assets/income and synchronizing with relevant blockchains, wallets and exchanges.

But mining operations are far more intricate and unique. They must be able to view the balance and value of all their mining production in real-time, across many blockchains, wallets, and mining pools. 

 

The wild web of tracking so many variables across the blockchains is difficult to navigate through. Yet, the difficulty keeps increasing. Cloud-hosted mining rigs operated remotely from smaller organizations across the world, tracking how much crypto they have generated, calculating payouts and viewing accurate balances is imperative but no simple task.

 

As a platform built to serve each specific vertical from professional investors, crypto-focused businesses and enterprise-grade company’s, Blox was built with crypto mining in mind.

 

  • Real-time Blockchain Nodes – Blox runs our own nodes on 13 different blockchains, which provides miners with more tracking options, should they wish to select a particular blockchain to mine and track balance, revenue and asset movement. Some services only have access to only Bitcin or Ethereum nodes, but with Blox, they can easily track their mining income from NEO, Litecoin, Stellar, Tron, Dash and other leading blockchains with ease.
 
  • Smarter Snapshots of Daily Balances – Blox’s intuitive snapshot feature and can display a companies asset balances across all the different blockchains currently being mined for. Users can take advantage of specific filtering options to narrow down results. They can also rely on our end of day, end-of-week and end of month snapshot options to get a clear and accurate view into your cryptos performance, value and for reconciliation.
 
  • Cloud-Hosted MiningUnique to our platform, miners are capable of tracking how much crypto is being mined from cloud-hosted mining rigs, and its real-time value or within any specified dates. Blox takes organization to the next level by providing mining companies with the ability to build, organize and segregate portfolios based on each cloud-mining customer. This provides smarter categorization and an easy ability for bookkeepers to work on each individual customer account.
 
  • Intelligent Account Structure – Blox’s proprietary ‘Chart of Accounts’ logic is highly intuitive, capable of separating mining income from other various mining pools. Additionally, the platform can auto-categorize the source of any income stream. We save businesses a tremendous amount time that is normally spent reconciling accounts, portfolios and the source of where crypto was generated.
 
  • An Industry-Leading Platform – The Blox platform is already helping some of the world’s largest crypto mining companies, such as a 55-megawatts capacity mining operation with the ability to mine around 100 BTC per-day. The sheer volume of clients, transactions, blockchains and intricate tracking factors highlights the prowess of the Blox SaaS solution.
 

 

 

 

Powerful Security For Peace Of Mind

 

The future of crypto accounting is becoming more and more necessary as crypto and blockchain become increasingly accepted in the mainstream arena. Tracking and managing assets for accounting and bookkeeping are exceptionally vital for professionals and businesses that rely on the accuracy of their numbers and require automation to handle their large volumes of assets and transactions. When it comes to the core of what professionals and businesses desire, crypto management and accounting needs to be one-hundred percent accurate and leverage automation, and that requires powerful security.  

 

We keep your assets and private information safe and secure with an array of security-focused features. We start right from when you sign up, using Auth0, a universal authentication, and authorization service. We enable TouchID and FaceID for securely logging into your account, quarterly security audits, secured account synching, and distributed admin privileges to limit control and authority.

 

To take it to the next level, Blox uses “Read-Only” access to provide a one-way window into your companies crypto accounts and information. That means no actions can be made in real life while using the Blox platform.

 

(Read more about security in full here) 

 

 

Eliminating Dependence On Spreadsheets With Automated Solutions

When it comes to spreadsheets, a tool millions around the world use for business, most people never consider the lack of security until it’s too late. The Blox platform provides comprehensive security to offset the risks that businesses face when relying on Google Sheets and Microsoft Excel, for storing and managing sensitive crypto financial data. 

 

Google Sheets

 

  • Shares information on a massive scale between people inside and outside of an organization
  • Employees are one-click away from enabling public visibility and editing from outside your network
  • The open and collaborative nature means private data does not have guaranteed security
  • Manual entry is prone to human error and input mistakes
 

Microsoft Excel

 

  • Only built for a single user in an off-line scenario
  • Excel files are usually shared via email between people in or outside of the organization
  • Very poor permissions and security controls can leave your information insecure
  • No dedicated tools for accountants and bookkeepers such as audit trails and automated inputs
  • Can be easily shared with the wrong person with no ability to revoke access

 

Blox was built with safety and security in mind.

 

  • Blox does not allow our platform to publicly expose your data or share it with the wrong person in or outside of the organization
  • Collaboration becomes seamless, simple and secure with privileged access settings for each user.
  • Empowering accountants and bookkeepers with dedicated tools built just for them.
  • Read-only access for a one-way window into a company’s crypto assets

 

The Top Crypto Accounting & Tax Firms You Should Know About

 

Cryptocurrency has taken the world by storm, both technologically and financially, and it’s only in its infancy.

 

As blockchain technology continues to revolutionize business operations, crypto’s market cap hovers around $164 billion as of April 2019. Spread across more than 2,500 currencies (according to Investing.com), that money requires a different breed of accounting firm to handle it.

 

Several growing companies are luckily working in this space to blend financial professionalism with technological know-how. This list covers some of the top accounting and bookkeeping firms in the crypto industry today:

 

1. The Crypto CPAs

Straightforward and masterful, The Crypto CPAs helps average American citizens stay aboveboard with their crypto investments. Founded by two crypto-loving CPAs, this company also provides services for ICO projects to stay in compliance with all major regulatory bodies.

 

2. BPM

A full-service accounting and consulting firm, BPM doesn’t just do crypto — but it does that, too. With 40 partners and a top-five ranking in the Bay Area, BPM offers services for exchanges, risk and investment management, alternative lending, payment processing, and everything in between.

 

3. La Rusa

Based in Clearwater, Florida, La Rusa may not be a big-city firm, but that doesn’t mean it’s out of the crypto loop. On the contrary, La Rusa has helped Americans navigate the emerging crypto world for the last few years. Focusing on citizens and businesses alike, this firm helps clients avoid unexpected headaches come tax time.

 

4. Wilson Tax Law Group

In trouble for filing cryptocurrency taxes incorrectly? Fear not — Wilson Tax Law Group is here to help. With tax attorneys experienced in the uncertain crypto world, Wilson knows how to help clients limit their tax liabilities and come to mutually acceptable agreements with the IRS.

 

5. Taxing Cryptocurrency

As the name suggests, Taxing Cryptocurrency is all about cryptocurrency tax and accounting services. With a team of crypto-savvy CPAs and bookkeepers, Taxing Cryptocurrency helps citizens and businesses limit their liability and invest in the crypto market with confidence. This may be a new company on the block, but its employees have been involved in the crypto evolution since the beginning.

 

6. MyCryptotax

Based in the U.K., MyCryptotax offers a full range of cryptocurrency accounting and bookkeeping services. While other companies stick to tax season, MyCryptotax handles long-term projects including wealth management and bookkeeping. Unfortunately for Americans, this business only operates in the U.K. for now.

 

7. Bumpers & Company

Unlike crypto startups, Bumpers & Company has been around for quite a while — since the 1920s, to be exact. The firm has evolved with the times and now offers cryptocurrency management for all its existing services, which include tax planning and preparation, consulting, accounting, and auditing for individuals and small businesses.

 

8. CliftonLarsonAllen

While the IRS and other regulators shuffled their feet, CLA took matters into its own hands. Today, this established firm’s teams handle individual and corporate cryptocurrency accounting needs. The company prides itself on its ability to go beyond compliance to help investors big and small manage their cryptocurrency financials.

 

9. Green Trader Tax

Traders need CPAs who understand their unique financial needs. Green Trader Tax takes pride in providing for those needs by helping traders, investment managers, and other active contributors to the cryptocurrency revolution keep their affairs in order.

 

10. IBA Group

IBA considers itself to be the leader in cryptocurrency and blockchain accounting for good reason. With a full suite of crypto accounting services for individuals, companies, and even other accounting firms, IBA helps everyone with a stake in the crypto world. Whether for short-term tax questions or broader concerns about strategy, IBA does it all.

 

11. Happy Tax Service

A remote firm, Happy Tax Service keeps things simple for crypto investors. Offering a variety of packages, Happy helps exchange users of all activity levels keep their finances in order on up to 10,000 transactions across up to 20 exchanges.

 

12. Cross Law Group

Operating in all 50 states, Cross Law Group specializes in federal and state returns for cryptocurrency investors and traders. From individual to business taxes and from domestic investments to offshore accounts, this business knows how to help crypto lovers with tax preparation and consultations.

 

13. Crypto Tax Girl

Laura, the Crypto Tax Girl, has helped more than 600 clients understand the evolving world of crypto finance. Focusing on small businesses and individuals of all wealth levels, her company has deep experience with how the IRS treats cryptocurrency taxation and how investors can limit their liabilities. She offers consultations, gain and loss reports, returns, and advisory services, plus two tax courses for DIYers.

 

14. Goldfine & Company

Based in New York City, Goldfine & Company likes to stay up to date on the latest cryptocurrency trends and coins. With experience accounting for more than 700 coins across a variety of exchanges, this firm keep clients in compliance all year long. Goldfine & Company works with individuals and businesses of all sizes.

 

15. Bitcoin Taxes

After Bitcoin set the cryptocurrency standard, Bitcoin Taxes arose to help individuals and accountants navigate the churning waters of the cryptocurrency sea. With extensive, user-friendly guides on crypto tax filing, Bitcoin Taxes allows users to import data from exchanges to file easily and quickly. For those who need further help, Bitcoin Taxes even offers a directory of taxation professionals.

 

16. Fagan & Fagan

Thanks to 30 years of experience and clients ranging from individuals to international enterprises, Fagan & Fagan has seen it all. This California-based CPA firm handles all traditional CPA tasks, including tax preparation, accounting, consulting, and bookkeeping, and knows how to address crypto investments in every stage of the process.

 

17. Crypto Tax Advisors

Founded by a former Big Four senior tax manager, Crypto Tax Advisors helps both investors and accounting firms understand the ins and outs of crypto trading and taxation. This firm doesn’t just help crypto traders file taxes — it can also help businesses structure their operations to maximize savings. Tax professionals can consult Crypto Tax Advisors to learn how to help their own clients with crypto.

 

18. Pythagus, LLC

More than an accounting firm, Pythagus brands itself as a financial management company with a deep background in crypto. Acknowledging how little guidance the IRS provides for crypto investors, Pythagus helps individuals and businesses with accounting, reporting, and compliance. This company accepts crypto payments and owns coins in multiple wallets, so clients know they’re working with someone who walks the walk.

 

19. Seva Ltd.

Though licensed in Maryland and Alabama, Seva Ltd. provides services to clients worldwide. Focusing primarily on business clients, the firm takes over the role of CFO for small businesses to handle books, payroll, and more. Blending expertise in cryptocurrency, immigration, foreign tax law, and regulatory compliance, Seva Ltd. helps clients all over the world keep more of their crypto earnings.

 

20. Tax Cryptos

Neil E. Kelley, founder of Tax Cryptos, has worked in derivatives trading and taxation since 1978. Today, his firm offers tax advice to crypto traders and miners in addition to its traditional securities commodities clients. Working from limited guidance from the IRS, Tax Cryptos educates clients on the letter and spirit of crypto tax law to make compliance simple.

 

21. Genesis Tax Consultants, LLC

While most firms cater primarily to Americans at home, Genesis Tax Consultants does much of its business for expats abroad. The firm acknowledges that crypto law as it exists today treats coins the same as property, capital gains and all, but recognizes that could change any year. Would-be clients can peruse the firm’s rich historical accounting of crypto’s emergence into the taxable world before booking services.

 

22. JAG CPAs & Co.

As a firm dedicated to entrepreneurial growth and client success, JAG CPAs & Co. wants to help more entrepreneurs realize their dreams. In crypto, that means helping everyone from small-time investors to crypto startup founders. As one of the few firms able to help ICO clientele, this company’s simple, no-nonsense approach and fixed price agreements make collaboration easy.

 

23. Out West Advisors

Created to bring accounting and CFO services to underserved industries and markets, Out West Advisors knows how to work in the c-suite with confidence. Based in California, the experts at Out West Advisors like to get involved with the businesses they serve to design custom solutions and ensure everything they touch not only stays in compliance but remains optimized for success. Though not explicitly a crypto-focused firm, this company has more than enough experience to help investors and crypto business owners alike.

 

24. Harp Law

People deep in the cryptocurrency world need lawyers who understand their unique positions. Harp Law not only offers tax compliance and reporting services but also contract assistance for developers and service providers, social media influencer agreements, and advertising. For any matter involving crypto law, Harp Law has the experience the tackle the challenge.

 

25. Founder’s CPA

Not many accounting firms operate with the same tech-forward, entrepreneurial approach that Founder’s CPA takes. Focused exclusively on startups and small businesses, this firm runs an expert blog that walks crypto lovers through the shifting world of crypto taxes (as well as other small business concerns). Founder’s CPA’s niche approach allows it to provide deep, expert guidance in the startup and crypto arenas.

 

26. Crypto Tax Pro EZ

Crypto Tax Pro EZ helps crypto investors of all stripes handle their reconciliation reports and tax preparation. Specializing in cases where investors may be a bit behind their obligations to the IRS, this company begins every client engagement with a thorough analysis of previous returns to identify potential problems. With the past settled, Crypto Tax Pro EZ helps clients develop strategies to minimize future liabilities.

 

27. Camuso CPA

More than a tax preparer, Camuso CPA wants to help clients take a proactive approach and gain long-term perspective about their crypto accounting needs. With ongoing business support, Camuso clients can feel confident that they are not only in compliance but positioned for continued success. Thanks to a deep network of connections in cryptocurrency circles, Camuso staffs an expert team with a unique perspective on crypto accounting.

 

28. Global Expat Advisors

American businesses operating overseas file taxes, too, and Global Expat Advisors wants to help. With extensive experience in offshore business accounting, this firm understands how to help business clients keep more of their cryptocurrency without falling into hot water with regulatory bodies. Because offshore accounts already fall under extra scrutiny, Global Expat Advisors works to ensure clients from average traders to high-volume miners stay compliant.

 

29. Temko Financial Consulting, LLC

Temko Financial Consulting partners with a variety of crypto clients, which is why the firm offers classes to help new investors understand the financial implications of their new investments. Based in Tampa, Florida, but serving clients nationwide, Temko Financial Consulting provides both financial and IT consulting services for businesses working in the crypto industry.

 

30. Virtual Tax Inc.

Individuals and businesses anywhere in the country can lean on Virtual Tax Inc. for cryptocurrency accounting help. By keeping everything online, simple, and efficient, this firm guides both fledgling investors and savvy crypto experts through the pitfalls of tax compliance. Virtual Tax Inc. serves mostly smaller clients, providing the personalized help that the unique crypto industry needs.

As cryptocurrency becomes a more common investment vehicle, more firms will learn to help individuals and businesses navigate the crypto waters. These firms are some of the first to do it, and their early experience in crypto makes them ideal partners for anyone looking for assistance now or in the future.

 

LEADING CRYPTO ACCOUNTING FIRMS

 

31. Friedman LLP

 

Our industry-focused practice features concentrated areas of expertise and understanding of the economic environment. We have the ability to be 
innovative in our approach, act quickly in our decision-making and be flexible in our delivery of services. Our clients benefit from hands-on contact with our partners, cutting-edge technical expertise and our understanding of their industry and their business.

 

32. Cohen & Company LTD

 

Cohen & Company has developed one of the leading cryptocurrency audit and tax practices in the country, with more than 100 professionals providing in-depth expertise related to digital assets, initial coin offerings (ICOs) and crypto exchanges. Full integration with our nationally recognized Investment Industry Services team has enabled us to develop specific, tailored procedures for the audits of cryptocurrency funds.

 

33. Armanino LLP

 

Blockchain technology offers businesses in many industries the opportunity to increase trust among customers, vendors and third-parties, by enhancing the accountability and effectiveness of how they currently transact – recording transactions in a shared, transparent, secure and immutable manner. Armanino is your partner to bridge the gap between the idealistic potential of blockchain and the reality of your daily operations.

 

34. Azran Financial

 

Azran Financial views every client relationship like a partnership. We believe that OUR success is a result of YOUR success. We are committed to providing close, personal attention to our clients. We take pride in giving you the assurance that the personal assistance you receive comes from years of advanced training, technical experience, and financial acumen. There is no firm more qualified for all of your accounting needs.

 

 

35. JFDI Accountants

 

A global leader in crypto accounting, JFDI’s turnkey solution will quickly help you analyze and report your crypto activity accurately. They provide crypto accounting, reporting and digital asset management for industry leading companies such as Hosho, Kraken and Quantstamp.

 

 

36. Aprio LLP

 

Aprio helps manage the complexities of Blockchain tax and financial reporting. Their years of experience enables the development of accounting and financial reporting best practices, helping companies navigate the domestic and international accounting and tax obstacles associated with cryptocurrency and blockchain accounting, while maximizing the value of blockchain ventures.

 

When introducing people to the world of crypto cost basis, it is important to define it in its current state.

 

 

“Cost basis” is a term that simply refers to the original cost of an asset. If we know how much we paid for something, say a share of stock in a company, it’s straightforward to calculate our profit or loss on it. But cost basis calculation is more challenging for crypto assets than traditional finances. There are no clear guidelines or best practices for helping companies calculate their cost basis, asset performance, and tax liabilities if they use crypto. This leads to inaccurate tax and P&L reports, which can create unnecessary liabilities and negatively affect business decisions.

 

In order to identify the solution, we must first zoom in on the problem:

 

Missing data: Companies with lots of operational time behind them might find parts of their transaction data missing or inaccessible. Some exchanges furthermore only provide partial transaction records.

 

Classification: Unlike bank statements, blockchain records don’t provide any information about the nature of the transaction or the people involved. If we didn’t mark it at the time, we probably forgot about it.

 

Excel spreadsheets: These are a favorite tool for many companies, but they are prone to human error and manual maintenance. Today’s users expect automation.

 

Scale and complexity: Many companies store assets across multiple wallets and exchanges. The more assets and accounts a company operates, the more complexity it adds to their operations.

 

This is only a partial list of concerns. It doesn’t mention the lack of clear rules on crypto taxation, or the lack of standardized reports available from wallets, custodians, and exchanges.

 

Most companies react by improving their bookkeeping practices or consulting CPAs with crypto experts. If you’re doing the same, then you’re already on the right path.

 

Calculating cost-basis

The common cost basis calculation method for crypto assets uses the FIFO method (first-in, first-out). To make it as simple as possible, let’s take the following example; Two years ago you bought one bitcoin when it was trading for $500. Two months latter, you bought one more Bitcoin for $1,000. Your balance now shows the you own 2 Bitcoins which cost you different amounts of money to obtain ($500, $1000). After holding your Bitcoin for 2 years, you finally decided to sell 1 BTC for a whopping $15,000. Under FIFO calculation method, your cost basis is derived from the Bitcoin which was earliest in your possession, in our case $500 — selling it for $15,000 generated you $14,500 in profit.

 

Since every crypto transaction is a tax event, it is valuable to monitor profits or losses that were triggered following a transaction for tax reporting purposes and for accurate measurement of your crypto activity.

 

This example is relatively simple, but the calculations get complex for companies operating in this space with a high-volume of transactions. Companies all have many different uses for cryptocurrencies, like airdrops, coin offerings, forks, bounties,revenue, and even paying salaries. Furthermore, most companies don’t have proper records of their crypto transaction. Sometimes, what appears as a “sale” might actually be a transfer to a new wallet or exchange account. With tens of different assets used in thousands of transactions, the end result is a maze of financial activity that makes it almost impossible to calculate your crypto profit or loss.

 

Companies have a few options to address the issue. The easiest and most effective is to improve crypto bookkeeping practices, and well as hire a specialized crypto accountant. Some companies may also make use of online crypto tax calculator, but these aren’t especially useful to most.

 

Be deliberate

 

The golden rule of cost basis starts with internal practices. If there’s one piece of advice relevant to every company in the space, it’s to “be more deliberate.” Some companies invest in ICOs, buy back their own tokens or engage in an airdrop campaign. In the “Wild West” days of crypto, this sort of activity largely went overlooked. But legitimate companies today must think twice before transacting with crypto assets — every action is taxable, every decision must be carefully executed, and transactions need to be accurately recorded.

 

Seeking the advice of an expert crypto accountant is usually the next step, and these people will definitely help you organize your books. Make sure you choose an experienced firm, and test their knowledge by discussing your next airdrop or an impending Bitcoin fork. If that conversation confuses them, then keep searching.

 

The less reliable solution is to use online services that purport to calculate your tax liabilities and save you money in just a few minutes. Calculating cost basis and the related tax implications is no simple task. Professional general ledgerL systems like QuickbooksXero, and TurboxTax took years of development in order to reliably perform suck complex tasks. Today’s solutions for crypto assets don’t offer the same level of depth and control, leaving your company to submit incorrect reports or making financial decisions based on incorrect calculations.

 

Until legal framework is solidified, the most important decisions a company can make is to continuously be deliberate and seek third party guidance.

 

Improving your crypto bookkeeping practices

 

It’s finally time to start getting your cryptos in order. We listed a few tips and hacks that might help:

 

Try automation for a change, there are many tools which allow you to automatically pull data from any number of wallets and exchange accounts. Replace the outdated practice of using blockchain explorers and data extracts in order to stay on top of your transactions. Use automation, ‘set it and forget in’.

 

Structure your wallets the right way; a chart of accounts allows us to assign financial transactions to specific accounts for accounting purposes. Savvy crypto users apply this idea to their wallet set up and try to open as many wallets as possible for the different crypto uses they have. For example; ‘Petty cash wallet’, ‘Income wallet’, ‘General expenses wallet’. Having this kind of segregation directly on the blockchain is one benefit we can enjoy in the chaos of trying to keep our crypto assets in check.

 

Permissions and governance; as most companies are their own custodians, in many cases the people who hold the majority of crypto assets will be the company founders. The tech background and sometimes ‘cyberpunk’ attitude is not a welcome attribute in areas where laws and compliance are so material. Make sure corporate governance and permissions are structured similarly to your fiat transaction approval process and be assertive when such restrictions are not executed rigorously.

 

Mistakes might be harder to correct; crypto assets and blockchain is unforgiving at times. We are granted with an absolute freedom yet in many cases we find ourselves making irreversible mistakes; Losing a private key, sending the wrong amount or the wrong wallet etc. Remember that every action you take is irreversible, if you are transacting without proper log keeping and caution it will be extremely hard to retrace your steps moving forward.

 

To summarize and conclude, every introduction of new technology into a business might be challenging at the beginning but extremely rewarding over time. Most of us are working in the blockchain space because of the notion that something bigger than us is taking place Some call it a revolution, the next internet while some think its a fraud. No matter the case, there were only a number of instances in which technology has the potential of dramatically disrupting financial recordkeeping and accounting practices. Today, each and every one of us should lift our head from the endless clutter of our crypto finances and feel a little lucky for the opportunity to be working at the bleeding edge of financial technology.

 

I can’t remember a time in which the big four and other prominent accounting firms were ever excited to invest in a new, risky and experiential technology. The potential of blockchain has the world curious and desiring to innovative. Sometimes it’s worth it to just stop to enjoy everything that’s happening around you, we all have a front row seat.

If you can’t already tell, the future is bright for crypto accounting, tracking and management. Blox is perfectly primed and ready to scale to absorb the pending volume of users that require our powerful features to support the expected rise of blockchain transactions. 

 

For businesses, enterprises and professionals seeking automation, precision accuracy and powerful tools and features, Blox is the platform they can count on.

 

 

Enrich Your Knowledge

The Current State of Crypto Accounting 2019

Understanding Security for Crypto Management & Accounting

Navigating Cost Basis for Crypto

Why Managing Crypto Assets Is Different From Fiat

Beginners Guide & Checklist for Crypto Management

What To Look For In Your Crypto Accounting Platform

 

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