As 2024 comes to a close, we reflect on an incredible year of growth, innovation, and industry leadership at Ledgible. From groundbreaking partnerships to thought leadership in navigating the IRS's new 1099-DA regulations, here’s a look back at our biggest highlights:
1. The Financial Revolutionist - 1099-DA
In April, we had the opportunity to speak with the Financial Revolutionist on how the new 1099-DA will impact tax information reporting.
What will the 1099-DA do for tax reporting?
“Interestingly, in the future, Form 1099 reporting could be made obsolete by leveraging blockchain and identity tokens to withhold tax at the source and report directly to the IRS in real time,” Dean of Ledgible told The FR. “Innovations in this space could help to solve many of the regulatory reporting gaps that still need to be addressed especially around decentralized digital asset providers.”
2. Politico - Draft 1099-DA Guidance
In April, we also spoke to Politico around the new draft 1099-DA form, providing guidance to tax payers and brokers around the new regulations.
Oh, a new (draft) crypto tax form
On top of that, Jessalyn Dean of Ledgible noted the IRS would have to offer taxpayers more guidance on when crypto losses might not able to be written off — arguing that a proposed box dealing with non-deductible losses stemming from a “reportable change in control or capital structure” doesn’t give brokers nearly enough advice on what circumstances might qualify for that situation.
3. CryptoNews - 1099-DA Readiness Assessment
Following the release of the 1099-DA, we also released a readiness assessment to help companies prepare for the new regulations, which was covered widely in the digital asset space, like by CryptoNews.
Ledgible Announces Readiness Assessment for Digital Asset Companies Preparing for IRS 1099-DA
Jessalyn Dean, Ledgible’s VP of Tax Information Reporting, has been actively engaging with the IRS, ensuring that the voices of digital asset companies are heard. It’s a bit like having a scout in enemy territory, bringing back vital information to fortify defenses.
Why It Matters This is more than just compliance; it’s about setting a standard in a rapidly evolving field. As digital assets continue to blur the lines of traditional finance, staying ahead of tax obligations isn’t just good practice—it’s essential for survival. Ledgible’s readiness assessment isn’t just preparing companies for a new form; it’s preparing them for the future of finance.
4. Accounting Today - How tax & accounting professionals can prepare
We also had the opportunity this year to sit down with leading accounting publication, Accounting Today, to inform tax and accounting professionals about how they can prepare to comply with new digital asset tax reporting regulations, released later in the year.
Getting ready for new digital asset reporting regs
The Internal Revenue Service is currently drafting proposed regulations on digital asset reporting requirements, but their final direction remains uncertain.
The Tax Reporting Conference, held each year in May, shed some light on digital asset reporting on the new Form 1099-DA, as well as the proposed regulations. Jessalyn Dean, vice president of tax information reporting at cryptocurrency tax and accounting software developer Ledgible, noted that the IRS is currently working on the Crypto Asset Reporting Framework, which would coordinate the U.S.'s collection and exchange of tax information on non-U.S. people to foreign tax authorities.
5. BeInCrypto - TIR for Tokenized RWAs and Franklin Templeton partnership
This summer, we announced our platform for tax information reporting for tokenized real-world assets along with our partnership with Franklin Templeton, widely applauded by those in this emerging industry and covered in-depth by BeInCrypto below.
Ledgible Launches Tax Reporting for Tokenized Real-World Assets (RWA)
Notably, Franklin Templeton, one of the world’s largest investment managers, recently launched the first US-registered fund to use a public blockchain to process transactions and record share ownership. The firm partnered with Ledgible, reflecting the necessity for tax reporting solutions.
“This is an exciting step in our continued journey to make the digital assets ecosystem more accessible to both traditional and blockchain-native investors. We are also building the framework for BENJI tokens to be interoperable with additional tokens in the not-too-distant future,” Roger Bayston, Head of Digital Assets at Franklin Templeton, said.
Franklin Templeton’s collaboration with Ledgible highlights the capability to integrate multiple blockchains and on-chain data, enabling tax obligation calculations and advanced financial reporting. It also showcases proficiency in cost-basis calculation, data normalization, and reconciliation with legacy systems, which are critical for producing Forms 1099 and 1042-S.
6. Ledgible Releases digital asset reporting whitepaper
Following the official release of the finalized digital asset 1099 reporting regulations, our team of tax information reporting experts published a comprehensive whitepaper to help those in the industry comply.
Ledgible Releases Whitepaper on New Digital Asset Tax Reporting Regulations, Offers Expert Analysis
“After analyzing over 400 pages of new guidance, we believe that the IRS and U.S. Treasury have addressed a number of critical implementation issues regarding custodial and hosted broker reporting in a positive way. We are pleased that they adopted a number of our comment letter and testimony recommendations, including exempting tokenized money market funds from Form 1099 reporting similar to their non-tokenized counterparts, amongst others,” said Ledgible’s Jessalyn Dean. “Beware though, digital asset platforms not offering hosted wallet services are not out of the woods yet. Some of them may still be in-scope of gross proceeds and cost basis reporting where they have outsourced the hosted wallet infrastructure to a third-party, sometimes referred to as white-labeled wallets or wallets-as-a-service. All digital asset platforms should take care to consider the impact of these final regulations.”
7. Bloomberg - SEC & Crypto
We had the opportunity to sit down with the reporting team at Bloomberg this year to discuss how the SEC was handling crypto.
SEC’s Relaxed Stance on Crypto Guidance Fails to Appease Critics
Companies have discussed with the SEC security measures they have in place to address risks that concern the regulator—an education that helped open the door to banks serving crypto holders, said Kell Canty, co-founder and CEO of Ledgible, a tax platform for digital assets.
Banks and other entities are beginning to put in place measures to address ongoing regulatory uncertainty and the risk of hacks and theft. The regulator has encouraged companies to meet with staff to determine whether those guidelines could apply to them, said an SEC source familiar with the agency’s approach.
Still the bulletin had a chilling effect on the industry by blocking some of the most well-regulated entities that were best-positioned to address those technical and legal challenges from serving the market, Canty said.
“We have clients who their plans for participating in the digital asset world were changed and put on hold because of SAB 121,” Canty said.
8. Forbes - Understanding the finalized digital asset regulations
The experts at Forbes were curious about how companies can prepare for the beginning of digital asset reporting regulations, coming in January of 2025.
The Sky Isn’t Falling After IRS Finalizes Crypto Tax Reporting Rules
Dean explains that it's really hard to assemble records, especially in crypto. "Actually tracking basis," for digital assets, says Dean, "is a nightmare for taxpayers."
There are not only lots of transactions happening—there are multiple kinds of currency. According to TIGTA, the number of types of virtual currency has grown significantly since April 2020, from 5,000 to over 26,000 as of July 2023. That’s an increase of 420%.
9. CPA Practice Advisor - How to prepare for the 1099-DA
We spoke to CPA Practice Advisor about how CPAs can prepare for the 1099-DA.
IRS Shares New Draft Version of Crypto Tax Form
“The pressure is now on the IRS to finalize Form 1099-DA and publish the accompanying broker instructions. Brokers and their software providers need ample time to develop and test their systems to ensure compliance in time for reporting,” she said.
10. Ledgible discusses the draft 1099-DA released by the IRS
When the draft 1099-DA was released, the experts at Ledgible quickly dug in and dissected everything that you need to know about completing the form for your clients.
IRS Releases Draft Digital Asset Tax Reporting Instructions for Form 1099-DA
The IRS has recently issued draft instructions for Form 1099-DA, focusing on tax reporting requirements for brokers, such as crypto exchanges. Below are the key highlights from the draft instructions, providing an overview of what brokers and taxpayers can expect.
11. FinExtra - Tetra Trust chooses Ledgible for reconciliation
Canada's leading custodian chose Ledgible for it's reconciliation process, covered by FinExtra below.
Digital asset trust company Tetra chooses Ledgible for reconciliation processes
By working with Ledgible, Tetra Trust gains access to a powerful platform capable of addressing its complex reconciliation and data needs. This integration enables Tetra Trust to perform seamless balance reconciliation across its internal data, ensuring accurate cross-checking and confirmation of all digital asset transactions. In a space where trust and transparency are paramount, having accurate, SOC-certified data on hand is essential for Tetra Trust to maintain its standing as a secure and reliable custodian.
12. NASDAQ Trade Talks
Jessalyn Dean joined NASDAQ Trade Talks to discuss the new 1099-DA reporting rules, exploring how blockchain technology could one day eliminate the need for Form 1099 reporting by enabling real-time tax withholding and reporting directly to the IRS. Dean's insights highlighted Ledgible's commitment to driving innovation in regulatory reporting.
13. Ledgible Submits a comment letter to the IRS
Ledgible Submits Comment Letter to IRS on 1099-DA
Ledgible demonstrated industry leadership by submitting a comprehensive comment letter to the IRS, advocating for practical and fair 1099-DA reporting standards.
14. PR Newswire - Ledgible partners with Franklin Templeton
ATLANTA, June 11, 2024 /PRNewswire/ -- Ledgible, the leading professional-first digital asset software platform for tax information reporting & compliance for digital assets, today announced their groundbreaking tax information reporting compliance operations.
"As federal regulations around digital assets, like IRS Form 1099-DA, mandate companies begin reporting out on their digital asset activities including tokenized real world assets, the Ledgible platform is uniquely positioned to ensure compliance," said Ledgible CEO, Kell Canty.
Looking Ahead
2024 was a remarkable year for Ledgible, but the journey is far from over. As the digital asset space continues to evolve and 1099 regulations officially go into effect in 2025, Ledgible remains at the forefront of innovation and regulatory excellence, empowering businesses to navigate a complex landscape.
What were your favorite Ledgible moments from 2024?
