The DeFi Tax-API.
New IRS rules are forcing crypto exchanges to solve the cost basis nightmare. The current tools are broken. Here's the API-first fix.
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⚡ The Signal
The era of "best effort" crypto tax reporting is officially over. For years, the burden of calculating gains and losses fell on individual investors, often resulting in guesswork and spotty compliance. But new IRS rules are about to change the game, leaving many American crypto investors scared and confused about transaction reporting. The introduction of Form 1099-DA means crypto brokers and exchanges will soon be required to report user sales and basis directly to the government, just like traditional stockbrokers.
🚧 The Problem
This shift creates an immediate, existential problem for every crypto exchange: cost basis calculation. It's simple when you buy BTC on Coinbase and sell it on Coinbase. It's a nightmare when you buy ETH on Coinbase, send it to a MetaMask wallet, stake it in Lido, provide liquidity on Uniswap, and then bridge it to another chain.
What was the true cost basis of that final asset? The data is scattered across multiple wallets and complex DeFi protocols. Existing tools are clunky, rely on manual CSV uploads, and frequently break when faced with novel DeFi transactions. Exchanges don't have a reliable way to calculate this for their users, but the IRS will soon demand they do.
🚀 The Solution
Enter BasisPath, an API that automatically traces the cost basis of crypto assets across wallets, exchanges, and DeFi protocols. It provides a single source of truth for regulator-ready tax reporting. By integrating a single API, exchanges and tax platforms can instantly determine the origin cost for any asset, no matter how complex its journey. BasisPath ingests raw transaction data and returns a clear, auditable history of an asset's cost basis, ready for Form 1099-DA.
