NODE40

Albany, NY

"QuickBooks for crypto" offering enterprise-grade transaction tracking for cryptocurrency tax compliance

• NODE40 can read and evaluate activity from all of your cryptocurrency sources like wallets and exchanges, and provide a simple and clear summary for how to file your taxes.
• Ability to examine blockchains activity that took place outside exchanges (on-chain tracking).
• Patent-pending SMART Algorithm applies financial/IRS rules to movement within and between portfolios to focus on asset lifecycle and in particular, taxable activity.
• Downloadable detailed and transparent audit records with tax forms to back up or explain your tax position to tax authorities or auditors.

Addressing the specific needs of an enormous market that has grown over 6x since 2015

• Total addressable market of $1.6B.
• In 2021, over 40M taxpayers will report owning or trading cryptocurrencies.
• 53% of crypto users move from one to another, creating a $20 million market of tax liability.

Team with deep expertise in blockchain technology

• Previously founded a masternode hosting and monitoring business.
• 20 years of experience managing web-based services.
• Expertise in blockchain hosting, blockchain accounting, and cost basis analysis.

In 2021, over 40M taxpayers will report owning or trading cryptocurrencies

Currently available off-the-shelf solutions are wildly inaccurate and not auditable. With traditional investments, there are typically long-established financial statements made available on demand by your financial institution that make it pretty easy to determine your tax liability. This is unfortunately not the case for crypto investments.

With cryptocurrency, you are on your own, but not because online cryptocurrency exchanges don't care or don't want to provide the necessary financial statement. It is because they do not have the information to do so. 

When they do report activity, cryptocurrency exchanges will almost always report incorrect numbers to the IRS, due to the exchanges not knowing the cost basis of your asset as you move currency from one exchange to another. This is a technical problem, not a legal problem, and NODE40 Balance was built to solve it.

A “QuickBooks” for crypto

After generating significant business revenue from their own crypto advisory business, founders Perry Woodin and Sean Ryan needed a way to determine their own corporate tax liability from their cryptocurrency invoices. After an extensive evaluation of the limited platforms that already existed and a deep dive into IRS property law, Perry and Sean realized that they'd need to build a solution themselves.

NODE40 has removed the complicated barriers to enabling cryptocurrency tax compliance

NODE40 is an intuitive and transparent cryptocurrency tax platform that simplifies the increasing complexity of tracking on-blockchain and off-blockchain transactions—enabling financial professionals to be leaders in blockchain and cryptocurrency accounting and ensure proper compliance management. NODE40 aggregates transactions from multiple sources, assigns cost basis, simplifies tax filing preparations, and more with unprecedented speed, transparency, and accuracy.

NODE40 offers cost basis tracking for the cryptocurrency industry. It is an essential software-as-a-service (SaaS) platform for accountants and auditors—going beyond traditional audit and tax services to simplify blockchain compliance.

NODE40 is a freemium subscription model, with paid subscriptions starting at $75 with seasonal promotional offers. Additional features are included with tiered plans leading up to a la carte pricing for customers or organizations with sophisticated or portfolios.

The data processed by NODE40 goes well beyond tax compliance. Our unique ability to track the actual transaction data provides insights into overall portfolio health, reports that support business accounting, and other compliance needs. 

With crypto assets on the rise, and increasing attention from the IRS, the timing couldn’t be better.

NODE40 plans to continue growth through a multi-modal market strategy

Channel Partners

• U.S. regulated exchanges with requirements to provide tax reporting to their customers.
• Foreign exchanges with both monthly reporting and annual reporting requirements.
• Certified Public Accountant (CPA) firms. Starting with the 2019 tax season, CPAs are required to ask their customers about their cryptocurrency interaction. 2020 tax returns ask about cryptocurrency as a top line-item on Form 1040.

Models

Standard referrals

• Custom referral link that is used for tracking signups.
• Channel partners may receive a percentage of revenue. 

Integrated referrals

• Channel partner with direct call to action on their platform. 

Subsidized referrals

• Integrated referral and the channel partner subsidizes the cost for their customers to use NODE40.

Targeted Marketing

CPAs with customers who have:

• Filed for extensions due to crypto.
• Receive an IRS letter.

Individuals who have received a 1099 (1099-K, 1099-B, 1099-INT, 1099-MISC other) from a regulated exchange.

Individuals who have received IRS 6173 (response required) and 6174/6174-A letters as well as the CP2000 (known underreported income).

Organic Growth

• Convert leads to paid users.
• Customer word of mouth.

NODE40 fills in the critical gaps left by other services

Transparent
NODE40 provides an independently verifiable audit trail that shows exactly what transpired

Proven Precision
NODE40 provides automated identification of all transactions provides defensible, auditable data.

Full-featured
NODE40 brings order to what sometimes appears to be chaos, at a competitive price point.

Bookkeeping/Tax Platforms

It’s still early, but within the next few years, the established bookkeeping and tax platforms will need to support cryptocurrency transactions. Acquisition of an existing platform makes the most sense.

Cryptocurrency Exchanges

The top-tier U.S. based exchanges all need to provide tax compliance support for their users. Due to the technical nature of cryptocurrency, the only way to provide that support is through a third-party platform like NODE40. A strategic acquisition by an exchange would provide a value-add and build customer loyalty. In addition, an acquiring exchange would gain insight into how their customers interact on competing exchange platforms. NODE40 is currently in talks with 2 of the top 4 crypto exchanges.

Audit Firms

Firms that specialize in accounting and audit require tools to assign and track cost basis.

Banks

Office of the Comptroller of the Currency issued News Release 2020-98 granting federally chartered banks authority to provide cryptocurrency custody services for customers.

The founders have contributed around $1.1 million in capital since starting the company. The Issuer anticipates that the total cost needed for continued or expanded operations will be approximately $750,000. NODE40 is seeking to crowdfund an amount between the minimum of $200,000 and maximum of $750,000 through the Offering. The minimum of $200,000 will be for ongoing operations. If NODE40 is able to complete a successful Offering, the members of the Issuer have committed to provide or arrange for sufficient financing for the Issuer to cover the remaining balance of the cost to achieve company objectives. Please also see Section V –“Financial Statements” and Appendix A for more information.

The information contained on this campaign page (the "Campaign Information") is furnished solely by the Issuer to prospective investors in the investment opportunity described herein. All Campaign Information is intended to be a summary of the terms and information contained in the Disclosure Statement and the Purchase Agreement, and is fully qualified by reference to those documents. In the event any Campaign Information conflicts with the terms of the Disclosure Statement or Purchase Agreement, the terms of those documents will control. The Issuer has provided the Campaign Information for inclusion on the website located at www.nextseed.com, and in no way will the Campaign Information be deemed to have been created or provided by NextSeed Securities, LLC, NextSeed Services, LLC, or their affiliates.