Tax season just passed and while many people won’t think about their troublesome taxes until next year, crypto investors will. Filling taxes for crypto and other digital assets is a complex process since capital gains vary depending on the price fluctuations of when an asset is sold. Luckily Bellevue-based ZenLedger is helping simplify the crypto tax process with its platform.
On Tuesday, the fintech startup announced it closed a $15 million Series B funding round led ParaFi Capital, a DeFi-focused investment firm based in Connecticut. Prior to ZenLedger’s Series B round, the company had raised $10.9 million across a seed round and Series A round, per data listed on CrunchBase.
“We had our best tax season ever so far. Record numbers of investors and capital are flowing into crypto, NFTs, DeFi, and we are happy to help all those people and their tax professionals with crypto accounting and taxes,” Pat Larsen, CEO of ZenLedger, said in a statement. “We are thrilled about the fantastic investors in this round, and I’m excited to work with them and their amazing portfolio companies.”
ZenLedger helps crypto and other DeFi investors keep track of their transactions by integrating with over 500 digital exchanges and wallets. After a user connects an exchange or wallet to the platform, ZenLedger creates a log of all transactions ever made by the user and lists the purchase and sale prices. From there, the platform can calculate gains and losses.
After reviewing transactions, users are able to download all the necessary paperwork to file their income tax returns either by themselves or with an accountant.
“As the digital asset space matures, we expect the demand for services that help provide regulatory and tax compliance to grow significantly over the coming years. We believe ZenLedger offers one the most comprehensive crypto tax solutions in the market today and will help meet that growing demand,” Ryan Navi, a principal at ParaFi Capital, said in a statement about the firm’s investment in ZenLedger.
With the new funding, ZenLedger said it will expand its crypto tax platform globally and continue innovating new products for the expanding world of DeFi.
ZenLedger is coming off the back of a highly successful year in which the company saw sales grow 5x, and the startup has been reaping the rewards this year. Five months into 2022, ZenLedger has hired four new executives and also renewed a contract with the IRS to be the department’s preferred crypto tax preparing software.
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