Clean Records for Wallets, Protocols, and Multi-Chain Activity
Tax software handles what exchanges already report. The hard part is the rest – self-custody transfers, DeFi swaps, NFT mints, staking distributions, and cross-chain bridges. We turn raw on-chain activity into clean, audit-ready records that produce accurate tax reporting and stand up to scrutiny.
Book a ConsultationOn-chain accounting is the layer beneath crypto tax reporting. Exchange CSVs capture trades on the exchange – and only the exchange. Once funds leave the platform, the rest of the activity (transfers between wallets, DeFi protocol interactions, NFT marketplace activity, staking distributions paid directly to a wallet, cross-chain bridges) is invisible to the issuing exchange and absent from any 1099-DA.
Without that off-platform activity reconciled, tax software produces results that look authoritative but are wrong – most often phantom gains, where transfers out of a wallet get treated as sales at zero cost basis because the software can't see where the funds went. Inflated gains, overstated income, missing income events, and unexplained adjustments are typical symptoms.
This service builds the underlying record: every wallet, every chain, every transaction, properly labeled and reconciled. The output supports a defensible tax return and works just as well for external audit, investor due diligence, or DAO/business reporting.
Scope of an On-Chain Accounting Engagement
A typical engagement turns a disorganized collection of wallet addresses, exchange exports, and protocol interactions into a single clean ledger with documented treatment per transaction.
Wallet inventory & address mapping
Comprehensive inventory of every centralized exchange account, self-custody wallet, smart contract wallet, and DAO-controlled address. Each address tagged by chain and purpose for downstream labeling.
Multi-chain transaction pull
Per-chain transaction history retrieved via block explorers, indexers, and APIs across Ethereum, L2 networks (Arbitrum, Optimism, Base), Solana, Bitcoin, and any other chains in scope.
Per-transaction labeling
Each transaction labeled by category: transfer between owned accounts, swap, deposit/withdrawal, income event (staking/yield), NFT mint or trade, fee, contract call, or ambiguous. Ambiguous transactions are resolved with you.
Cost basis reconciliation
Cost basis tracked through transfer chains so basis carries over correctly between your wallets. Wallet-by-wallet method applied where elected under Rev. Proc. 2024-28 safe harbor.
Gap analysis & resolution
Identification of missing transactions (gaps in transfer chains), duplicates, and mismatches between exchange CSVs and on-chain receipts. Each gap is investigated and resolved before the ledger is finalized.
Audit-ready ledger output
Final deliverable: a complete, documented ledger with each transaction's date, parties, asset, amount, USD value at the time, classification, and basis treatment. Suitable for tax return preparation, external audit, or due diligence.
On-Chain Accounting Engagements Typically Fit
Clients who do real work on-chain, or who need their crypto records to satisfy a higher bar than a tax return.
Active on-chain users with multiple wallets
You have several self-custody wallets across multiple chains and frequent activity that exchange CSVs alone can't reconcile.
Anyone seeing phantom gains in tax software
Your crypto tax software shows large taxable gains that don't match reality – typically because transfers between your own wallets weren't properly recognized.
DAOs and Web3 builders
Treasury operations, contributor payouts, grant distributions, and multisig activity needing properly maintained financial records for governance, tax, and stakeholder reporting.
Crypto-native businesses
Companies with multi-chain treasuries, accepting crypto payments, or paying contributors in tokens – needing consistent records for tax, GAAP/IFRS adjacent reporting, and audit.
Investors preparing for due diligence
HNW individuals or funds whose crypto activity is about to be reviewed by an auditor, prospective acquirer, lender, or estate attorney.
Anyone catching up on years of activity
If you've been on-chain for several years without keeping records, this is the engagement that produces the foundation for both current-year reporting and any prior-year amendments.
Real-World Examples
Engagements often begin in situations like these.
I have 15 wallets across Ethereum, Arbitrum, Optimism, Base, and Solana. My tax software is producing $300,000 of taxable gains and I know that's nowhere near right.
Typical cause: the software is treating outbound transfers between your own wallets as sales at zero cost basis. Each wallet is inventoried, addresses are mapped, multi-chain transactions are pulled, and transfers between your owned addresses are reconciled so basis is preserved end-to-end. After reconciliation, the actual taxable gain is typically a small fraction of the software's initial output.
Our DAO operates a multisig treasury on Ethereum and Base, pays roughly 20 contributors monthly in USDC and our governance token, and runs three small grant programs. We've never produced clean books.
Inventory of all treasury and operational wallets, pull of all inbound and outbound transactions, per-contributor payment ledger with FMV-at-payment, separate categorization for grants and program disbursements, and a final ledger structured for both tax preparation and any governance disclosure the DAO needs to publish.
I'm raising for a fund and my LPs want to see clean records of my personal crypto activity over the last four years before they sign.
Four-year reconciliation: every wallet, every chain, with documented basis treatment and clear records of income events. The output is structured so an LP, their lawyer, or an auditor can see exactly what happened, with primary on-chain references for each material transaction.
A Typical Engagement
Predictable phases. The labeling phase is where most of the judgment work happens.
Wallet inventory
You supply every wallet address you've used, every exchange account, and any contract wallets or multisigs you control. We confirm coverage by spot-checking transfers between supplied addresses.
Multi-chain transaction pull
Per-chain history retrieved for every address in scope, normalized into a consistent transaction format with timestamps, counterparties, assets, amounts, and contract metadata.
Labeling & categorization
Each transaction labeled by category. Wallet-to-wallet transfers matched. Income events identified. Contract interactions classified by protocol and intent. Anything ambiguous is flagged for resolution.
Cost basis reconciliation
Basis tracked through transfer chains so it carries over correctly. Wallet-by-wallet method applied where elected, with documentation supporting the election.
Ledger output & review
Final ledger reviewed with you, with a walkthrough of how each category of activity was treated and where any judgment calls were made. Output is delivered in a format suitable for tax return preparation, audit, or due diligence.
Relevant IRS Guidance
Record-keeping for crypto is grounded in general taxpayer recordkeeping rules plus crypto-specific guidance on cost basis identification.
IRC § 6001
The Internal Revenue Code's general taxpayer record-keeping requirement. Every taxpayer is required to keep records sufficient to establish income, deductions, and credits – and the burden of proof falls on the taxpayer.
Rev. Proc. 2024-28
The IRS safe harbor procedure allowing a wallet-by-wallet allocation of unused basis for digital assets, providing a path away from the previously default universal-pooling approach. Effective for 2025 onward.
Notice 2014-21
Establishes that taxpayers may use specific identification methods (including FIFO or HIFO) for crypto dispositions if they can adequately identify the units sold. Drives the recordkeeping requirements that underpin this service.
2024 Broker Reporting Regs
While focused on broker reporting (Form 1099-DA), the regulations indirectly shape best-practice basis tracking for self-custodied assets – particularly where broker-reported gross proceeds need to be reconciled against client-tracked basis.
IRC § 61
Gross income definition. Drives recognition of income events from on-chain activity (staking, airdrops, yield) that this service is responsible for identifying and valuing.
Form 8949 detail requirements
The per-transaction reporting requirements that drive the level of detail needed in the underlying ledger. Returns prepared from incomplete records often face questions on examination.
FAQs About On-Chain Activity
Questions clients ask about wallet activity, cost basis, and record-keeping. Each links to a fuller answer in our FAQ.
Get Your On-Chain Records in Order
Whether you're catching up on years of activity or preparing for a higher-stakes review, start with a free 30-minute consultation to scope what's involved.
Book a Consultation