By Michael Scott
Binance announced the release of the Binance Tax platform to facilitate users in ascertaining their tax obligations relative to their crypto activity. The platform targets to enable users to align their tax reporting in preparation for the upcoming tax season.
A substantial number of countries’ authorities have announced the tax season is almost starting. The start of the tax season obliges crypto firms’ readiness to help their customers comply with the revised local regulations.
Introducing Tax Reporting Tool
The February 6 update from crypto exchange Binance confirmed the introduction of a tax reporting tool to enable users to track crypto transactions. Scrutiny of the tax obligation will ease the reporting process for crypto users.
The announcement revealed that Binance Tax would enable users to download the tax summary report. The report will outline losses and gains that the users accrued in the entire trading year as captured in the Binance account. The report will feature various activities, including crypto donations, blockchain-oriented rewards, and spot trading.
The introduction of Binance Tax portrays the crypto exchange’s response to multiple inquiries as users seek detailed information on their tax liabilities. The new product has been in the pilot phase since launching in Canada and France. Binance seeks to incorporate the users’ response to the platform before extending it to other markets.
Reinforcing Compliance with Global Sanctions
The crypto exchange’s representative indicated the Binance Tax scope is limited to furnishing information recorded within the Binance ecosystem. Nonetheless, Binance assured users of expanding the scope to facilitate compatible integration with other platforms within the crypto industry.
The Binance Tax release coincides with the crypto exchange announcing a month earlier it would actively reinforce compliance with the global sanctions. The largest global crypto exchange acknowledged that regulators have, since 2022, aggressively tightened scrutiny and grip on crypto activity. In particular, Binance attributed the higher appetite for regulatory scrutiny of crypto-related activities to the infamous downfall of Three Arrows Capital and FTX that shook the crypto industry.
Appetite for Regulatory Scrutiny
Meanwhile, Thailand’s Securities and Exchange Commission is set to tighten its oversight roles. The Thailand security watchdog declared intense security to prioritize investors’ protection. The move mirrors South Korea and Netherlands regulatory agencies to probe 2022 incidents of non-compliance with the set standards.
The US is leading other regulators to probe fraudulent activities within the crypto scene. Kraken suffered hefty fines with its latest settlement with the Office of Foreign Assets Control within the treasury from compliance violations.
The US SEC update in December 2022 challenged firms to disclose the inherent risks in their activities and exposure to the filed bankruptcies. The announcement mirrored efforts by the House committee chairperson, Patrick McHenry, to reintroduce a crypto innovation bill. The bill will facilitate crypto firms to seek enforceable compliance agreements with federal agencies.