To Help Prepare Crypto Users for Tax Season, Binance Tax was Established

February 8, 2023 World Blockchain

With the help of the new tool, users may access tax information related to their cryptocurrency activity and report it in time for the upcoming tax season.

The tax season is quickly approaching for many nations, therefore businesses in the cryptocurrency sector must be prepared to assist their users in adhering to local laws.

In order to help users keep track of their cryptocurrency transactions for tax reporting purposes, cryptocurrency exchange Binance announced on February 6 that it is developing a tax reporting service.

The release states that customers can get a tax summary report from Binance Tax that contains any gains or losses that have occurred in their accounts throughout the year. This includes cryptocurrency donations, spot transactions, and incentives from blockchain-based forks.

The business said that this is in response to an increase in user questions concerning their tax obligations.

Prior to being introduced to additional international markets in the Binance ecosystem later in the year, Binance Tax is now in a pilot phase in France and Canada. It states that it will eventually grow to interface with other platforms in the sector even though it is only currently accessible for data stored on the Binance platforms.

This occurs one month after Binance declared its involvement in a group addressing global sanction compliance.

Global regulators have increased their control over the cryptocurrency sector over the past year, notably in the wake of the FTX crisis that rattled the sector.

The Securities and Exchange Commission in Thailand recently declared its intention to tighten regulations for the cryptocurrency business with an emphasis on investor protection. Exchanges have been the focus of regulatory investigations for non-compliance with regional norms in both South Korea and the Netherlands.

American regulators are also interested in the crypto ecosystem. In order to resolve compliance issues, the bitcoin exchange Kraken reached a settlement with the Office of Foreign Assets Control of the Treasury Department.

The US Securities and Exchange Commission requested that companies report their exposure to the risks and bankruptcies associated with cryptocurrencies in December 2022. A law on crypto innovation that enables businesses to apply for a “enforceable compliance agreement” with government agencies has also been proposed by the chair of a House committee.