Blox.io, an industry-leading platform for crypto accounting, management and tracking, has released new research on the challenges faced by crypto holders and CPAs when accurately reporting to regulators.
Titled “The Crypto CPA Insights Report,” is one of the first in-depth looks at the nascent crypto accounting industry, compiling insights from CPAs on the current hurdles that both individuals and businesses face when tracking and managing digital assets. As the Internal Revenue Service (IRS) begins to crack down, the Blox report suggests that only 5% of CPAs believe their clients – both businesses and individuals – are able to accurately or completely disclose assets and transactions for tax reporting.
However, this lack of disclosure may or may not be wilful, as 98% of the CPAs surveyed stated that missing or inaccurate data was the number one crypto accounting mistake. In addition, almost all stated that a lack of understanding of crypto tax rules was a key challenge, and that more government regulation and guidance was needed to direct prudent clients trying to do the right thing.
Statement From Crypto Tax Advisor
Sharon Yip, Founder of Crypto Tax Advisors, said: “If a business created 1,000 transactions per day, to 100 different wallet addresses, for 30 different departments, organizing and searching for those transactions is a needle in a haystack scenario. Relying on exchanges is also a dangerous game. Some only track a few months of transactions, while some shut down completely, leaving investors with no historical records of their transactions. This makes calculating profit and loss almost impossible, and could even lead to legal repercussions.”
CPA respondents also pointed to the lack of access to automated crypto accounting software and limited knowledge about the available crypto software solutions as a key challenge when helping their clients (89%).
CEO of Blox
Alon Muroch, CEO of Blox, said: “This is an entirely new industry and most investors and CPAs are still learning the ropes. One of the biggest problems is the lack of infrastructure. The more mainstream crypto transactions become, the more smart tracking and management tools become imperative. Human error can have serious implications. It comes as no surprise that most CPAs identified technology as a key component for the future of crypto accounting.”
The report shows 93% of crypto CPAs believe there will be smarter solutions and software in the not-too-distant future, while 81% specifically pointed to the need for increased automation for accurate record keeping and to establish best practices.
Education and policy were also revealed as two key areas for future growth, with 96% of respondents believing that more official rules and guidelines are around the corner, and 72% identifying the need for further education on crypto accounting, best practices, and technological solutions.
Blox is an industry-leading platform that provides crypto tracking, management, and accounting solutions for professionals and businesses. Established in 2017, the company is headquartered in Tel Aviv, with offices in Shanghai, San Francisco, and Gibraltar. Customers of the platform include industry giants such as eToro, Zilliqa, Beam, and eToro, and thousands of global users. Blox’s API technology is helping to empower businesses and professionals with the best productivity tools to manage all their crypto transactions, portfolios and assets.
About the Blox CPA Survey
Blox conducted an online survey of 20 leading crypto accounting and bookkeeping experts, who are focused on blockchain and crypto companies, projects, investors, and mining operations. The survey was distributed in August 2019. Respondents were all U.S. based.