Node40, the cryptocurrency tax compliance agency, and Alt36, the point-of-sales system geared towards cannabis businesses, recently announced a partnership to help Dash-accepting businesses stay compliant with regulations.
The partnership will help address the fact that regulatory compliance is still vague in the United States since 33 state governments have legalized some form of cannabis, but it is still illegal at the federal government level. Even more confusion arises with each branch of government requiring tax compliance from cannabis companies, even the federal-level Internal Revenue Service, but unclear rules for both cannabis and cryptocurrencies creates headaches for business owners.
Excited to partner w/ @AltThirtySix to help the legal US #cannabis industry reach mainstream business compliance. Our Balance #crypto accounting integration makes it simple to maintain accurate reporting while using @DashPay as an alternative to cash. https://t.co/ks2ZK1DETu pic.twitter.com/b3OWjZah2M— NODE40 (@Node_40) December 11, 2018
The press release described Node40’s Balance platform as a Software-as-a-Service (Saas) that “will help customers receive and process transactional data related to Dash payments, track sales tax and income valuations, verify blockchain transactions and report cryptocurrency gains and losses, and deliver summary-level information from processed data”. Perry Woodin, Chief Executive Officer of NODE40 described how this will help both Alt36 and their consumers.
“With the many cryptocurrency transactions Alt Thirty Six facilitates, our solution will make it simple for them to maintain accurate reporting and sound compliance. With this partnership, NODE40’s Balance platform is expanding its reach to serve enterprise clients, in addition to individual cryptocurrency holders.”
Alt Thirty Six CEO and Co-Founder Ken Ramirez further described how the partnership will help them grow cryptocurrency within the cannabis sector.
“NODE40 values top-notch technology, and it’s clear that their leadership team understands our mission to take the growing cannabis industry completely cashless.
We believe that digital payments are the future of global commerce, and we are confident that the combination of blockchain technology and Dash digital currency will revolutionize the payments industry.”
Difficulties and importance of staying compliant
The Balance platform enables users to grant access to their transaction history “from various hardware or software wallets, as well as exchanges like Coinbase, GDAX, Gemini and Bittrex”. Balance then “provides both a high level and detailed summary, including date, time, transaction type, short-term or long-term gains, and price differential”, which is documented on a worksheet and can be given to a CPA. This helps satisfy intricate rules within the US tax code, which can bring serious audits and penalties if not followed. The cannabis industry is under even more pressure since the industry exists in a semi-legal state and only enjoy certain protections so long as they comply with all other laws and regulations.
However, the cannabis industry is not the only sector that can benefit from assistance with crypto tax compliance. Traditionally cash-only or cash-heavy industries such as food trucks, small coffee shops, basic labor work, and generally unbanked individuals have often had their record keeping called into question. Within the US these businesses are still liable for taxes and bad record keeping can cause massive headaches. Cryptocurrencies’ ability for record keeping and Node40’s Balance service would allow these industries to easily stay tax compliant and avoid many regulatory risks and consequences.
Dash harnesses its unique structure to assist users
Dash is a decentralized, digital, peer-to-peer currency, but since all data is stored on the blockchain, it is easy to see transactions, which will hopefully fend off undue regulations from government officials afraid of privacy. However, Dash still offers PrivateSend, which mixes transactions, but still stores all information on the blockchain to give extra security and privacy to those that want the service. Thus, Dash is able to offer some compliance-flexibility since it is able to have service’s like Node40 built on top of its platform to help real world businesses with compliance to avoid very real world consequences from lack of compliance. However, Dash does not want to be a “government-friendly” cryptocurrency as leaders of other coins have pondered. Dash wants to be digital cash that can be used in everyday purchases and take a significant market share from fiat currency and give individuals more financial and monetary freedom.