Ernst & Young LLP (EY) has acquired the technology assets and related patents of the Andy Crypto-Asset Accounting and Tax (CAAT), a technology developed by San Francisco-based startup Elevated Consciousness, Inc., that connects with multiple cryptocurrency exchanges and wallets, allowing for better visibility into cryptocurrency transactions and inventory.
The acquisition is part of EY’s strategy to expand blockchain-related capabilities and services worldwide and position itself as a leader in cryptocurrency accounting and tax, the firm said on Thursday, July 19th.
“Cryptocurrencies and blockchain are transformational forces with a strong potential to fundamentally change the way business is done,” said Kate Barton, EY’s global vice chair of tax services. “CAAT positions us as a leader in serving a variety of companies adopting crypto-assets in an evolving regulatory environment.”
Michael Meisler, EY’s tax partner and tax blockchain leader, said that the uncertainty in applying existing guidance related to the timing, character and source of income generated in connection with trading and investing in crypto-assets required the use of flexible solutions.
“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 Meisler.
“Technologies such as CAAT can help EY member firms and their clients effectively navigate this analysis. CAAT will allow us to help clients investing in crypto-assets, both in the fund space and beyond.”
Paul Brody, EY’s global innovation leader for blockchain technology, said the firm plans to integrate the CAAT tool into our Blockchain Analyzer portfolio, a suite of blockchain and cryptocurrency transactions audit technologies. EY announced the pilot of the EY Blockchain Analyzer in April. The pilot was intended to lay the foundation for automated audit tests of blockchain assets, liabilities, equity and smart contracts.
“This acquisition is another element in building out a portfolio of blockchain and cryptocurrency solutions across our businesses,” said Brody.
“Tax strategy, planning, and execution will be a key part of everything we build across our solutions, from supply chain management to software licensing solutions.”
The acquisition was sourced by the EY Americas Tax Innovation Foundry, a services and business accelerator launched in 2016 to further the next generation of tax services EY offers clients.
“For the Foundry, this marks an important milestone in our exciting journey to launch new digital businesses that drive transformation and growth for EY member firms and create new unique value for EY clients. The Foundry’s portfolio of digital businesses continues to grow as we demonstrate success in our venturing efforts,” said Chirag Patel, leader of the Foundry.
The acquisition of the CAAT tool is latest move by one of the Big Four consultancy firms into blockchain technology. In June, EY in partnership with Microsoft launched a blockchain solution for content rights and royalties management for media and entertainment industry. In May, PwC acquired a stake in VeChain S.E.A., a Singapore-incorporated blockchain services provider.
https://coinjournal.net/ey-acquires-cryptocurrency-accounting-and-tax-technology/
