By Ian Allison, www.ibtimes.co.uk
Lykke, a blockchain-powered trading platform, has partnered with another startup called CryptoTax to provide customers with country-specific tax reports on their recent crypto gains.
Within the last year blockchain based tokens experienced an extreme increase of attention and value. Lykke enables the efficiency of blockchain technology in financial services even to non tech-savvy customers by reducing complexity and providing a unique customer experience in the field of digital asset trading.
CryptoTax, a brand of Munich based 21 Consulting GmbH, is offering and constantly developing tax reporting solutions and other regulatory declaration services for customers of cryptocurrency exchanges and users of blockchain assets to help them be compliant with the law of their residence state.
The vision of the German company is to simplify legal obligations for investors in digital assets by serving easy but high-quality services to businesses and private individuals. CryptoTax says it has a strategic alliance with KPMG to get access to their worldwide network of tax and legal experts and to ensure a constant coverage of the current state of legislation.
Considering the price spikes of blockchain assets within the last month, a bulk of cryptocurrency users are expected to have high taxable income in tax year 2017. Also the awareness of regulators and tax authorities is constantly increasing. But since there are various unanswered questions regarding the legal qualification and taxation of digital assets a lot of users struggle to calculate their taxable gains and losses and need help to fulfill their regulatory and tax declaration obligations.
Zurich-based Lykke offers users to trade cryptographic tokens, fiat and virtual currencies by simply using their mobile device running an iOS or Android operating system. Using so-called "colored coins" (which are described as blockchain based collateralised debt obligations) the exchange allows the transfer of any kind of real-world asset to the Bitcoin blockchain and enable trading of such without incurring transaction fees.
Richard Olsen, Lykke founder and CEO, said : "This is one more step along the way toward making blockchain-based trading a viable alternative to traditional markets. It is essential for us to be able to offer a wide range of reporting and declaration services. Transparency is one of our foundational values: trust among our user base, and openness to regulatory authorities. CryptoTax's strategic thinking demonstrates their shared commitment to these goals."
Klaus Himmer, CEO of 21 Consulting, said: "Because of our experience in the conventional financial services industry we know that tax reports are already market standard and will also help companies operating in the field of cryptocurrencies to reach a broader market acceptance while differentiating from other providers.
"We are very pleased Lykke chose us to support them to manage the increasing demand of country-specific tax reports. We are sure that the cooperation will help both parties to foster their strong market position and help them to drive the market acceptance of blockchain based financial instruments", he added,