For many countries, the tax season is right around the corner, which means companies in the crypto industry will need to be ready to help their users comply with local regulations.
On Feb. 6, crypto exchange Binance announced it is launching a tax reporting tool to help users stay on track of their crypto transactions for tax reporting purposes.
According to the announcement, Binance Tax lets its users download a tax summary report which includes any gains or losses which have occurred throughout the year in their Binance account. This includes spot trades, crypto donations and blockchain-based fork rewards.
The company said this comes as a response to a growing number of inquiries from users about their tax liabilities.
Binance Tax is currently in a pilot phase in France and Canada before it extends to other global markets in the Binance ecosystem later in the year. Currently, it is only available for information held on the Binance platforms, however, it says it is looking to expand to integrate with other platforms in the industry in the future.
This comes one month after Binance announced its participation in an association to address compliance with global sanctions.
Over the last year global regulators have tightened their grip on the crypto industry, particularly in the aftermath of the FTX crisis that shook the industry.
In Thailand, the Securities and Exchange Commission (SEC) recently announced that it plans to tighten up rules for the crypto industry with a focus on investor protection. Regulators in both South Korea and the Netherlands have targeted exchanges in probes for non-compliance with local standards.
Regulators in the United States have also been eying the crypto scene. The cryptocurrency exchange Kraken had to settle with the treasury department’s Office of Foreign Assets Control regarding compliance violations.
In December the SEC called on firms to disclose exposure to crypto bankruptcies and risks. Meanwhile, a House committee chair reintroduced a bill on crypto innovation, which allows companies to apply for an “enforceable compliance agreement” with federal agencies.