Keeping track of crypto portofolio with Accointing

By SaltwaterC | Crypto Notepad | 21 May 2020


If you only have one type of crypto and keep it in only one place without barely doing any transactions, then this article won't help that much.

Otherwise, I have found that it was getting increasingly difficult to keep track of my portfolio. Besides, even if I knew how much crypto I have at any given time, what I did not know is both the value of the portfolio and the potential tax liabilities without jumping through hoops. More about taxes a bit later.

After running around the Internets for a solution, I have finally decided to use Accointing.

Importing the transactions is fairly easy for the supported exchanges, wallets, and platforms as they offer integrations and documentation on how to do it. Unfortunately, not everything is supported, so I had to add few things manually. That's either completely manual by filling forms or importing from a CSV.

Basically, I have three wallets, two platform accounts, and four exchanges with actual transactions. Just looking at the recent history for the past month, despite not doing anything special in particular, I have done around 120 transactions (including automated TX such as airdrops) which otherwise would be far more difficult to track in a spreadsheet. Why so many exchanges and wallets? After narrowly missing both the MtGox bankruptcy and the sudden disappearance of another exchange, there's a lesson to be learned about not keeping all of the eggs in the same basket. Needless to say, I have more than one type of crypto as well.

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Their mobile application also allows a quick view of the portfolio. It is less useful for anything else which Accointing is offering.

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The best part of this is that they don't charge for this tracking service. But, since they are not in the business of losing money, the part that does cost something is the tax reports. However, I have found that they are very affordable, especially for the efforts they save and the fact that pretty much all of their competitors charge obscene amounts for issuing the tax reports. Also, a lot of them don't cater for my local market and that doesn't help as each country has a different tax code.

To give you an idea on how complex things may get, I am looking at my circumstances as an UK tax resident and the fact that this is my responsibility for tax reporting. Basically: the crypto income must be reported at the GBP market value of the crypto when it was earned. If the crypto is kept rather than liquidated into GBP, the capital gain / loss must be tracked until the crypto is either sold for GBP or converted into another crypto or foreign currency, for which, again, the capital gain / loss must be tracked. Then, there's the pooling rules when calculating the capital gain / loss which makes the maths even more complicated. Therefore, even for something like 100 transactions, it is a massive bookkeeping effort.

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A dedicated tool for crypto accounting starts to make sense. I have found particularly useful their tooling for reporting missing transactions when the balance sheet just doesn't add up.

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There's few things which may be improved - such as supporting multiple wallets and exchanges. I do realise that this is not a trivial effort and some exchanges may not even offer the right tooling for an integration to be possible. So, this isn't fully on Accointing. This bit is more of a temporary annoyance really - they sometimes lose access to the forex market quotes, therefore they can not calculate the portfolio value in the local currency. Then, everything defaults to USD until the access is restored.

The classification types could be extended to have a Fees category as not all of the transactions charge fees on the transaction itself. For example, when interacting with smart contracts for staking (see my article about Earn 25% APR during the Elrond Genesis Staking), there's alt least two transactions - one in ETH to pay for the processing power and the actual token transfer. These are imported from the wallet as distinct transactions. To mark the fees paid in ETH as a loss, I had to classify them as "Margin Fees" which technically is inaccurate, but it gives the right end result for the losses calculation.

There's also a one time gripe with the signup. Despite the UK being listed as a supported country, I have started the signup process about three times and gave up after I was only offered Euro as the currency to track the portfolio. This isn't very useful for tax reporting. Eventually pushed through with default Euro value which magically turned into the correct Pound Sterling setting as soon as I got access to the dashboard. So, it may be rough around the edges sometimes, but if they get the important bits right when it matters, I can live with that.

As usual, I am not a tax accountant and this article is not tax advice. Should you need advice, hire the services of a professional tax accountant.

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