Toku has raised funds amounting to $20 million even as regulators are forcing the industry to comply with industry standards in tax compliance and other related issues. The startup specializes in designing payrolls that are token-based and compliant to tax taxation regulations within their jurisdictions. This comes amid a tight scrutiny on crypto products from taxation authorities to ensure compliance in declaration of business proceeds and employee compensation among other issues. The startup could therefore come as an innovative solution to sort out tax compliance issues in the sector. These are uncertain times in the crypto industry as many startups are dealing with lawsuits from authorities for allegations of tax evasion.
The crypto tax compliance sector has also previously received investment from several big actors in crypto including Blockchain Capital, OrangeDAO, Nextweb Capital and Reverie among others. The investment has also received backing from major law firms that provide services in crypto tax compliance. Orrick is one of the notable law firms that has already jumped on board together with other firms that provide crypto tax compliance service providers like Alchemy that provides infrastructure in the sector. This multilateral approach is set to accelerate Toku’s growth towards achieving a global expansion and presence.
With international tax regulations becoming the largest huddle for investors and firms that want to expand their operations to the international community, Toku was designed to help these companies achieve tax compliance easily and focus on their major objectives in service delivery. Regulations also demand compliance in salaries in the crypto industry. In the wake of the turmoil in the crypto industry that led to the collapse of FTX, a closer look into the crypto bull market of 2022 reveals that most actors and companies within the crypto market had no tax compliance since it was not in their top objectives. The events the crypto turmoil brought with it have forced many sector stakeholders to prioritize tax compliance in order to avoid scrutiny by regulators. Scrutiny into crypto startups has proved catastrophe as many investors lose confidence and cash out their digital assets to avoid their seizure by authorities.
The startup has created a framework to keep tabs on tax laws and regulations across multiple countries so as to effectively offer tax compliance to its clients. It has since attracted about 30 clients according to a report from the co-founder of the startup. The clients span from enterprises to DAOs(Decentralized Autonomous Organizations) and includes companies like Gitcoin, Teller, Filecoin Foundation and PleasrDAO among many others. The board of management at Toku boasts a vast experience in the tax compliance sector as some of its members have worked for notable employers in the sector including The US Federal Reserve, European Central Bank and other numerous DAOs.
According to the board of management, they had to peruse through and review tax laws in more than 100 countries globally before they could even begin to develop Toku. This huge undertaking to review tax laws has put the startup at a better place in a sector that is still developing.
Apart from tax compliance, Toku also offers other facilities including token-based payrolls and token-based grant management as well as tailored services to DAOs in employment and compensation compliance. Stakeholders in other startups in the crypto community have welcomed this startup while expressing their contentment in focusing on other objectives while knowing that tax compliance and other related issues are dealt with elsewhere in a professional manner.
