PayPal backs crypto tax startup Taxbit

Taxbit will use the cash injection, of an undisclosed amount, to grow the team and expand the business.

PayPal, which started allowing consumers to buy, sell and hold virtual coins late last year, is one of a number of established companies to have taken a deeper interest in digital coins in recent months as the price of bitcoin has skyrocketed to record highs. (PayPal)

PayPal Holdings Inc's venture arm has made an investment in Salt Lake City, Utah-based tech startup Taxbit, which helps consumers and businesses calculate the taxes owed on cryptocurrency holdings, the companies said on Thursday.

Taxbit will use the cash injection, of an undisclosed amount, to grow the team and expand the business, said Austin Woodward, the company's chief executive and founder.

"Going international is a huge piece of the puzzle," Woodward said in an interview.

Taxbit has also raised funds via Coinbase Ventures, the venture capital division of the popular cryptocurrency exchange, and existing investor Winklevoss Capital, the family office founded by tech entrepreneurs Tyler and Cameron Winklevoss.

PayPal, which started allowing consumers to buy, sell and hold virtual coins late last year, is one of a number of established companies to have taken a deeper interest in digital coins in recent months as the price of bitcoin has skyrocketed to record highs.

Founded in 2017 by accountants, tax attorneys and software engineers, Taxbit has developed software that enables companies like cryptocurrency exchanges to issue tax forms to their users, and to allow consumers to calculate how much tax they owe on their crypto.

While bitcoin and other virtual currencies have been attractive to speculators, they have struggled to become widespread forms of payment in part because they are treated as property for tax purposes in the United States, making every transaction taxable.

Taxbit "can help people optimise taxes as they their use crypto throughout the year," Woodward said.