PayPal bought Taxbit company to process taxes on cryptocurrencies

PayPal, one of the largest electronic payment systems, has invested in Taxbit, a tax preparation startup.cryptocurrency. This was reported by Reuters with reference to Taxbit founder Austin Woodward.

The size of the investment was not disclosed, but Woodward said the funds raised will be used to develop the team and expand the business internationally.

“Going international is a big puzzle”Woodward said.

Taxbit previously raised funds through Coinbase Ventures and Winklevoss Capital.

Landscape formation

US-based startup Taxbit is alreadyformed a client base among cryptocurrency exchanges including Gemini, BlockFi, Uphold and CEX.io. With the help of capital, users of trading platforms can generate tax reports depending on the volume of cryptocurrency capital and trading activity.

PayPal invested in Taxbit shortly afterofficial entry into the cryptocurrency market: the payment service allowed clients to directly trade cryptocurrency. Soon, the head of PayPal, Dan Shulman, even stated that cryptocurrency payments would become part of the global financial system.

"... in the long term I am very optimistic about all digital currencies.", - said earlier Shulman.

Previously, PayPal tried to acquire a cryptocurrencycustodian BitGo, but the deal fell through. The reasons for the failure of the deal are not stated, but BitGo CEO Mike Belsh said that the custodian is not making a profit yet because it is in “growth mode.”

By investing in Taxbit, PayPal wants to preparethe basis for the mass introduction of cryptocurrency. According to calculations by the cryptocurrency exchange Coinbase, the size of institutional investments in Bitcoin in 2020 increased 3.5 times and exceeded $20 billion. At the same time, according to the head of Pantera Capital Dan Morehead, it is the institutions that are behind the rise in the price of Bitcoin, which create a shortage of the asset in the market.

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