Robin Singh

Koinly was born out of necessity. Portfolio trackers at the time couldn't generate tax reports, while tax software lacked the mechanics to accurately track crypto transactions. Too much manual editing was required. Like most other early adopters, I was using a spreadsheet that was a headache to maintain. The gap was pretty clear: software that made this simpler.

We researched existing tools, and they all lacked something, whether that was integrations, accuracy, or automation. When your spreadsheet starts looking like the best solution, there's a clear need for a better product. Being bootstrapped and independent has also meant we've been able to stay focused on the user experience and build based on what our users actually need, rather than chasing someone else's priorities.

Most investors aren't closely tracking their portfolio throughout the year. That means when it comes to tax time, they're suddenly having to reconcile hundreds or even thousands of potentially taxable transactions, from simple sales and trades to more complex positions like concentrated liquidity provision. And that's daunting. It can mean hours of work, frustration over missing records, and the added stress of knowing that getting it wrong could lead to an audit. We're always reviewing how we can reduce that burden for users.

The largest group of Koinly users are active traders, generally involved in DeFi, who use the tool year-round, not just at tax time. These users are multi-chain and generally at the forefront of new protocol offerings, meaning they need a tool that can tackle complex portfolio tracking. There's also a significant number of accounting firms now using Koinly as their preferred tool.

Thinking that if there's no specific guidance, there's no tax obligation. It's incredibly frustrating how slowly tax offices like the IRS release guidance, but just because that guidance doesn't exist doesn't mean there's no tax obligation.

Tax offices now have more visibility into crypto transactions than ever, but that data is limited and often incorrect. For an exchange's records to tell the full story, you'd effectively need to have only ever used that exchange. The reality is the vast majority of investors are using multiple exchanges and wallets, and that's where exchange-based reporting falls apart. If you've bought on one exchange, transferred to your wallet, and later transferred to a different exchange to sell, how could that exchange possibly have the information needed to calculate your actual gain or loss? Relying solely on exchange records as the source of truth would be a costly mistake for many investors.

Tailwind. Platform-based reporting, as we've already discussed, results in fragmented reporting that adds extra complications for users. We work with market leaders across the industry to provide tax solutions for their users.

We work closely with preferred CPAs and experts to understand the most conservative approach in the absence of guidance. But we also allow users to amend the tax treatment of specific transactions in their settings, so if their accountant wants to take a more aggressive approach, they can amend their settings to reflect that strategy.

We tackle this in several ways, first, with accurate data imports. Our product and development teams are constantly improving these, whether that means working with platforms to improve API data quality or better mapping CSV files. We've refined our automated transaction handling so that as many errors as possible are resolved before the user sees them. Finally, where manual reconciliation is unavoidable, we have extensive help guides on how to reconcile issues that come from missing data, as well as a dedicated and widely praised customer support team to resolve any trickier issues.

One of the small benefits of tax offices moving slowly is that we tend to have a long lead on changes beforehand, so our product and development teams can stay ahead. Often, the impact of those changes when they come into effect can be far more of a challenge. Take the challenges of the 1099-DA rollout for US investors this year. Exchanges struggled to get forms out to users on time, and when they could, the forms were inaccurate (as expected). We updated the product to support 1099-DA uploads, but the rollout still caused significant additional stress for people filing their returns due to a lack of clarity on how much the forms could be relied on and how they should be included in their tax return. It's why we have such extensive help and educational content to support the product itself.

We work with accountants and other experts locally in more than 20 countries to ensure our product is conformable for that jurisdiction's tax guidance. But one of the main pain points we focus on is making sure the data imported into Koinly is reliable, so our users can trust their calculated figures across a wide range of reports, giving them the flexibility to file as required.

We've been using AI to reduce manual data configuration for some time, including automated transfer matching, transaction merging, and error detection – and we continue to do so to offer improved accuracy and better solutions for our users. We're consistently upgrading our software in the background to improve this for users, to automate as much of the process as possible for them. As for making tax judgments, as ever, if in doubt, people should be speaking to an accountant, not ChatGPT.

All of these present new challenges for the industry and users. Tokenized stocks may bring wash sale rules into play, even though those rules don't currently apply to cryptocurrencies or RWAs such as tokenized commodities. AI agents may execute thousands of transactions, creating new reconciliation challenges for users who may not even be familiar with the transactions being made. We're working with industry leaders and experts both internally and externally to ensure our product is ready to tackle these challenges as they come.

Make time once a month to review your imported data in your tax software. The biggest complaint we see every year is "I have thousands of transactions to go through, and I've only got a week until the deadline". That task is far less daunting if you utilize Koinly's free portfolio tracking and regularly review your transactions and resolve issues as they arise.

At a minimum, they should check that all the exchanges, wallets, and chains they use are supported, but also look at the quality of that support. There's a huge difference in the quality of data and transaction handling between different tax software; it's why the calculations can vary so much between tools. That's all to do with the data that gets imported and how the tool processes it. For example, one tool may support Solana, but have limited support for something like concentrated liquidity provision on Solana. Obviously, for an investor using CLMMs, that can have a significant impact on how well the software handles their activity.

Crypto tax is still a headache, especially in countries like the USA where new legislation feels like it's actively making it harder. But ignoring it and hoping it goes away won't stop an audit, especially as tax offices have more visibility into your transactions than ever. Koinly can't take all the stress out of tax deadlines, but it can save you a lot of time and generate the forms you need with figures you can rely on.

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