Navigating the intricacies of cryptocurrency transactions, especially when it comes to taxes, has long been a formidable challenge even for the most avid of crypto users. Not anymore and not on Nexo. Following up on our successful integration with renowned crypto tax reporting tool creator Koinly, we invited their Head of Tax, Danny Talwer to answer any pending community questions in this month’s AMA.
The Nexo community spared no time in getting right down to what matters with their questions – watch the whole event below, dedicated to Nexo’s integration with Koinly.
If you’re all business today and just looking for the key questions and answers from the AMA, here are the top three enquiries and what our AMA host, Magy, and guest Danny had to say about them:
Q: For long-term Nexo users, does the Koinly integration on Nexo support the full transaction history from past years too, and how far back does this support extend?
Magy: Users can seamlessly transfer their entire transaction history from the inception of their Nexo usage to Koinly, ensuring accuracy in tax reporting, especially for assets acquired in previous years. The integration allows users to upload transactions from the beginning of their Nexo journey and sync them with just a few clicks, offering a holistic view of their financial activities.
Q: How are the prices of crypto deposited on Nexo by other exchanges managed? How can Koinly find the purchase price to calculate any capital loss or capital gain?
Danny: The API integration with Nexo allows Koinly to directly extract market prices. Additionally, live market price feeds are sourced from aggregators like CoinMarketCap and CoinGecko. Users need to provide their entire transaction history for correct cost basis calculations. It’s also crucial to import transactions across different wallets and exchanges in order to receive a correct report.
Q: How do Nexo and Koinly ensure the security and privacy of user data during the integration process, especially considering the sensitive nature of financial and tax-related information?
The pivotal question regarding the security and privacy of user data in the Nexo-Koinly integration process was posed by Gabriel, prompting a critical debate.
Magy: Each of our users is assigned a distinct, coded ID that is exclusively operative within the Koinly framework. This unique approach guarantees a safe and secure transmission of data, specifically tailored for Koinly's use. This method not only reinforces our commitment to privacy and security but also ensures that each interaction with Koinly is personalized and protected.
Danny: Koinly adheres to enterprise-grade security standards. The platform has undergone rigorous security audits, strictly complying with established frameworks. The API integration's security is designed with utmost safety to ensure that Koinly cannot access users' wallets or accounts. All API access is read-only, providing users with an added layer of assurance.