One of the ‘Big Four’ accounting firms in the world, Ernst & Young has acquired the cryptocurrency technology and patents from Elevated Consciousness, a start-up specialising in digital currency, based out of San Francisco. The technology for Andy Crypto-Asset Accounting and Tax (CAAT) connects multiple digital exchanges and wallets to provide a clearer perception of the cryptocurrency transactions and inventory.
This comes across as a major development in the global financial realm as EY is one of the most influential organisations in the FinMarkets. EY’s strategy, according to a report, is to broaden the blockchain sphere and earn itself a position as a global leader in cryptocurrency accounting and tax.
“Cryptocurrencies and blockchain are transformational forces with a strong potential to fundamentally change the way business is done,” Kate Barton, the vice chairman of the division of taxes at Ernst & Young said. “CAAT positions us as a leader in serving a variety of companies adopting crypto-assets in an evolving regulatory environment.”
More and more people are taking up investment in cryptocurrency and an increasing number of firms now own a significant value of crypto assets, which might require a rather different approach to taxation. The investors could use guidance through the timing, nature and the source of income generated through investing and trading in cryptocurrencies.
“By allowing taxpayers to model different potential outcomes, they are better able to assess their risk related to reporting taxable income for this new asset class,” said EY’s tax partner and blockchain leader, Michael Meisler.
CAAT as an initiative is a breakthrough in the financial industry where blockchain and cryptocurrency are gaining momentum. The technology was developed by a team of Silicon Valley entrepreneurs headed by VJ Anma, a former cryptocurrency fund manager. Anma is thrilled about joining hands with the EY Americas Tax Innovation Foundry that is trying to act as a medium between the technology creators and the clients.
“Numerous firms are interested in technology around cryptocurrencies like CAAT, but the unparalleled entrepreneurial know-how and experience that the Foundry offers is what attracted us to the EY organization,” Anma was quoted as saying. “The organization is positioned to be a leader in the blockchain and crypto-asset space. My team and I are excited to support EY as the technology is taken to the next level.”