Binance.US, the US arm of the world’s largest cryptocurrency exchange by volume, has partnered with Sovos, a startup that focuses on cryptocurrency accounting and auditing, in order to modernize its tax information reporting.

Binance.US will use Sovos’ technology to automate its 1099 forms and filings, which helps reduce potential human errors and ensure automatic regulatory updates. The company’s Tax Information Reporting solution, which has experience in handling tax issue in alternative currency markets, allows Binance.US to protect its users just as investors of other asset classes.

“The reporting  Obligations  Obligations In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you or will owe you money that is considered an obligation. Different Types of ObligationsBonds, banknotes, and coins are examples of obligations because they assure users that they are accredited with the face value of that item. Obligations play a considerable role in personal finance and should be included in every budget. While every budget is different from one another, individuals can use the Financial Obligation Ratio (FOR) that is published quarterly by the Federal Reserve Board as a good reference point on how to best structure individual budgets. For those in the process of retirement planning, obligations should be scrutinized with a wide scope.These should include typical financial obligations such as mortgage payments and healthcare expenses that may incur. In trading, obligations are dealt in the form of put options and short selling or they may refer to the selling of shares on the next trading day after they were purchased in delivery. When obligations fail to be met and legal proceedings have begun, the severity of the punishment set forth is primarily determined by the terms of the contract although juror and judge intervention may lessen the obligations that must be met to fulfill the contract. In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you or will owe you money that is considered an obligation. Different Types of ObligationsBonds, banknotes, and coins are examples of obligations because they assure users that they are accredited with the face value of that item. Obligations play a considerable role in personal finance and should be included in every budget. While every budget is different from one another, individuals can use the Financial Obligation Ratio (FOR) that is published quarterly by the Federal Reserve Board as a good reference point on how to best structure individual budgets. For those in the process of retirement planning, obligations should be scrutinized with a wide scope.These should include typical financial obligations such as mortgage payments and healthcare expenses that may incur. In trading, obligations are dealt in the form of put options and short selling or they may refer to the selling of shares on the next trading day after they were purchased in delivery. When obligations fail to be met and legal proceedings have begun, the severity of the punishment set forth is primarily determined by the terms of the contract although juror and judge intervention may lessen the obligations that must be met to fulfill the contract. Read this Term for cryptocurrency continue to evolve at a breakneck pace, often lacking clear guidance from regulatory authorities. By implementing Sovos, Binance.US can be assured of always having the latest changes pushed to us through an automated platform,” said Joshua Sroge, interim CFO, Binance.US.

“As the rules and regulations around cryptocurrency tax reporting remain unsettled, the Sovos regulatory team continues to be at the forefront of changes, so we can help platforms like Binance.US quickly adjust to the reporting requirements and stay compliant,” said Paul Banker, general manager of Tax and Regulatory Reporting at Sovos.

US regulator get tough on crypto taxes

Binance has originally entered the US market in late 2019 via a partnership with BAM Trading Services, a FinCEN-registered company, to roll out the new platform exclusively for customers based in the United States. Binance has licensed its matching engine and wallet technologies to its US partner which handles operations into compliance with local regulations.

Most recently, Binance.US has added an over-the-counter (OTC) trading portal, which allows the  Execution  Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a common marketing point of emphasis by brokers, whose action execution varies considerably from company to company. When execution prices are not matching the submitted price the client is charged or credited the difference resulting from the negative or positive slippage.Slippage is a very contentious issue among retail traders, which can lead to issues. Many traders view levels of slippage at brokers as a key determinant for their business. Best Execution a Legal ObligationBrokers are required by law to diver to their clients the best execution possible. Some regulators are requiring brokers to submit execution stats in order to assess the quality of their services. Other brokers are regularly posting execution statistics in order to boost the confidence of their clients in the best execution commitment of the company.Best execution has been a point of emphasis in recent years from both retail and institutional players in the FX industry. Negotiating and executing transactions in order to promote a robust, fair, open, liquid and appropriately transparent FX market is identified as one of the six main principles outlined in the FX Global Code of Conduct, which came into effect in 2018. Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a common marketing point of emphasis by brokers, whose action execution varies considerably from company to company. When execution prices are not matching the submitted price the client is charged or credited the difference resulting from the negative or positive slippage.Slippage is a very contentious issue among retail traders, which can lead to issues. Many traders view levels of slippage at brokers as a key determinant for their business. Best Execution a Legal ObligationBrokers are required by law to diver to their clients the best execution possible. Some regulators are requiring brokers to submit execution stats in order to assess the quality of their services. Other brokers are regularly posting execution statistics in order to boost the confidence of their clients in the best execution commitment of the company.Best execution has been a point of emphasis in recent years from both retail and institutional players in the FX industry. Negotiating and executing transactions in order to promote a robust, fair, open, liquid and appropriately transparent FX market is identified as one of the six main principles outlined in the FX Global Code of Conduct, which came into effect in 2018. Read this Term of transactions on a large variety of crypto and fiat pairs.

This collaboration with Sovos should address the reporting needs of the cryptocurrency customers in the upcoming tax season. As such, accounting professionals servicing crypto-transacting clients will have sources required when reconciling cryptocurrency balances and transactions.

Recently, there have been numerous reports emerging of tax authorities clamping down and going after cryptocurrency traders. The US Internal Revenue Service (IRS) also sent letters to taxpayers who might have failed to report income and pay the resulting tax from cryptocurrency transactions.

At the very core, the IRS still deems crypto assets to be property rather than currency for income tax purposes, the same as its regulatory guidance came out five years ago. That means the authority will continue to tax crypto profits and losses like those for stocks, at capital gains rates.