The Need For Trusted Crypto Accounting Solutions, A Goal To Be a Leader in Corporate Governance – Bitcoin Magazine
This is a sponsored article provided by Verady.
Decentralized cloud storage platform Storj Labs is one of the most exciting projects in the blockchain-based technology space. Embodying many of the best qualities of decentralized and new cryptocurrency technologies — including peer-to-peer functionality, open-source development, encryption and blockchain-powered payments — it is designed to make a core function of our digital world faster, cheaper and more secure.
But when any cutting-edge project gets to a certain size, it will invariably need to leverage the tools provided by its peers. Following a token sale in 2017, Storj’s financial complexity changed dramatically and this, in essence, is how Storj came to find Verady and its Ledgible system for crypto-based accounting and reconciliation.
“We were working on version two of the platform, it was live and we were doing something on the order of magnitude of 100,000 micropayments a month,” explained Matthew May, Storj’s CFO. “Generally, we are always trying to have the best practices for how things were being tracked and managed, but it was challenging to have a single source of truth for what the company’s total crypto holdings and activities were looking like in real time.”
Verady’s offering stood out for its on-chain transactions focus when May conducted a comprehensive search of the platforms available to help Storj Labs accurately track and manage its accounting. After evaluating various industry solutions, Verady’s Ledgible was a good fit for the needs of the company. The platform’s ease of use and integrations with outside accounting platforms proved critical for Storj, and the company soon realized significant cost savings in tracking Ethereum’s gas payments alone. It also became a leader in cryptocurrency governance and compliance using the tools from Verady.“Storj strives to be an example for corporate governance and how to do things the right way in this new world,” May explained. “We have a strong desire to lead the way in reporting to our stakeholders as evidenced by our quarterly token report. Ledgible is the primary source of truth for that report. It enables a layer of transparency that we want to deliver, but the process was a challenge before Ledgible.”
Before Verady, Storj (like many decentralized businesses) managed its accounting and reconciliation manually — oftentimes using an array of spreadsheets to track thousands of transactions. This approach may be convenient at first but lacks the functionality needed as businesses scale.
“As we scaled the number of Storage Node Operators we needed to pay on a monthly basis, we found an increasing need for a solution that would help us better track ETH gas fees,” May said. “At the time, we were sending out tens of thousands of payments each month, which scaled to over 100,000 and even a slight decrease of fees on each transaction could help us capture significant savings.”
Verady recently completed a System and Organization Control (SOC) audit for its Ledgible platform as part of its commitment to integrity and trust. Accuracy and quality of data is a priority for the Verady team so it can offer a solution that meets high standards and integrity. SOC is a universal framework developed by the American Institute of Certified Public Accountants (AICPA) to verify compliance and a strong system of internal controls by financial and technological institutions.
The Growth of Ledgible, in Partnership With Storj
The partnership between Ledgible and Storj has benefited both companies and their early adopters. As one of the first significant adopters of the technology, Storj has provided feedback and real-life use cases that have helped inform Verady’s refinement of its accounting and reconciliation solution.
“Ledgible’s feature set and early roadmap were shaped by Storj as an early adopter. They were a great help,” said Verady Co-Founder Kell Canty, “Their forward-looking requests for Ledgible to incorporate tracking, reporting and compliance of their own token is a fantastic use case outside of the other core capabilities. It also shows their dedication to financial transparency and responsibility.”
After becoming a Verady client, May also joined Verady’s advisory board to help the team building Ledgible better understand the needs of users, particularly CFOs and those who are responsible for the regular accounting of a company’s crypto holdings.
It’s this kind of flexibility and potential for growth that Verady feels is critical to Ledgible’s continued success. For instance, with new regulatory guidance for the industry arriving from federal agencies (and more sure to come), Verady will ensure that its product evolves as well.
Verady’s commitment to providing best-in-class offerings that support the cryptocurrency ecosystem, even as the space changes, has resonated with Storj’s and Verady’s other customers. The approach has resulted in clients, including Storj, who not only use Ledgible but also recommend the platform to peers throughout the industry.
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“For companies that are tracking crypto and performing reconciliation manually or have built some home-grown solution, the value proposition for Ledgible is really simple,” May said. “Your focus should be on the execution of your business. Period. Even though we’re in the crypto space, we depend on proven solutions like Ledgible to handle the complicated and ever-changing world of crypto accounting so that we have more time to spend on our own fundamentals.”
Tax Solutions, More Innovations To Come
The Internal Revenue Service (IRS) has released current guidance regarding tax treatment of crypto assets, and Verady has been hard at work on extending Ledgible’s platform and its tax capabilities in accordance with this guidance.
“Lately, we are seeing increased activity and enforcement from regulatory agencies in the United States, particularly the Internal Revenue Service,” Canty said. “We are proud to continually provide best-in-class, certified crypto auditing and accounting solutions. Now we are leveraging that expertise in the area of cryptocurrency tax as well.”
Global tax and accounting giant Thomson Reuters and Verady recently announced a collaboration on their Virtual Currency Organizer to help taxpayers have certainty on their transaction history and underlying crypto assets. With a button click, Ledgible users or their CPAs can create reports ready for Thomson Reuter’s GoSystem Tax and UltraTax — both of which integrate this cryptocurrency data to streamline preparation and minimize audit risks with full data auditability.
And how does May view the new tax solution and focus on continued innovation?
“Their well-documented commitment to innovation is a real gift to the crypto industry,” he said, “They have an accounting solution that provides us with everything we need to prepare our corporate tax returns in an environment that seems to be ever changing. We greatly value the relationship as we continue to strive to be a leader in compliance in this emerging space.”
I am a Crypto author and journalist. I have been writing about cryptocurrencies and blockchains for over 5 years. I have also been a guest on numerous podcasts and radio shows, discussing these topics. In addition, I am also a crypto advisor and consultant.
