The venture arm of PayPal financed TaxBit, a startup specialized in the taxation of cryptocurrencies.
A useful tool since the tax framework is often ambiguous and complex to apply. Declarations of gains in cryptocurrencies are rarely a pleasure for the taxpayer. A declaration that can become more complex when the person has participated in aidrops and made profits from yield farming or staking.
This financing operation is PayPal’s latest initiative in the cryptocurrencies industry. Other investors include Coinbase Ventures and Winklevoss Capital. The twin brothers’ venture capital firm had already participated in an initial $5 million financing.
Austin Woodward, founder of TaxBit, said :
“This investment will help us achieve our goal of becoming the most innovative and trusted provider of tax technology for cryptocurrencies.”
In France, a similar startup called Waltio offers the same type of service applied to the French tax framework.
PayPal is more and more involved in the cryptocurrencies ecosystem. In December, the payments giant participated in a $142 million fundraising event to support the development of Paxos. This company provides PayPal’s infrastructure dedicated to the purchase, sale and preservation of cryptocurrencies.
PayPal would have also considered other acquisitions in the industry, although a rumor of a purchase of BitGo eventually failed.
In 2021, PayPal plans to make payments in cryptocurrencies available to the 26 million merchants in its network. Users will be able to make purchases from merchants, but will not be able to send cryptocurrencies to any outside address or service.
In the case of PayPal, it is significant to understand that the customer will not have direct access to his funds unlike an exchange platform or even better a wallet. As always, we do not recommend using Paypal to purchase cryptocurrency because users will not have access to their keys directly on the platform. “Not your keys, not your coins!”