Trillion Digital Assets Case Study

TDA initially prioritized establishing a robust regulatory framework, ensuring compliance with the existing financial regulation at both state and federal level in the United States. This foundational phase included securing a Money Transmitter License in Florida and registering with the Financial Crimes Enforcement Network (FinCEN).

However, as TDA expanded its operations, the firm encountered challenges in identifying a vendor capable of providing a comprehensive accounting system. This system needed to seamlessly integrate both cryptocurrency and fiat currency ledgers, while also possessing the scalability to handle a high volume of transactions and manage complex data sets.

Luis states, "We needed a way to reconcile our crypto and fiat trading activity in order to set up our financials in an efficient manner." Thus, the challenge was to find an accounting software provider with a system that would allow the consolidation of the trading activities with their internal operating activities seamlessly. The absence of such a specialized accounting solution required the exploration of alternative approaches to meet the intricate financial reporting and management needs of TDA's expanding business landscape.

Why SoftLedger?

TDA's journey to SoftLedger began with an exploration for a more capable accounting solution. Their connection with SoftLedger came through one of various financial consultancy firms that SoftLedger maintains partnerships with. As Daniel recalls, the transition to SoftLedger required “a comprehensive assessment with regards to the architecture of how the system would be customized” which allowed TDA to cover all of its accounting needs under a single vendor. The shift proved transformative automation and scalability for TDA.

SoftLedger's strength lay in supporting multiple annual audit procedures. Daniel emphasizes the software's versatility, highlighting its "digital asset subledger works really nicely for a firm that requires an enterprise solution." Given TDA's unique position as a boutique operation serving sophisticated participants, SoftLedger's ability to handle both high volume and intricate transaction details was invaluable.

Another advantage was SoftLedger's ability to support the automation of repetitive data entry tasks. While TDA started with semi-manual processes, they recognized the potential to shift to API-based automation as their transaction volumes grew. Currently TDA is expanding its automation with Softledger by continuing to add automated workflows.

The Solution and Impact

SoftLedger's ability to consolidate multiple tools and data sources proved instrumental for TDA. The firm saw itself using various fragmented tools including customized software, internal tooling and inadequate softwares such as Excel. A significant achievement was the easy matching of crypto transactions to fiat transactions, allowing for multi-currency, multi-entity setup and API connectivity simplifying the accounting and reconciliation process.

Daniel touches upon an unexpected benefit, "Consolidating balance sheets amongst multiple entities was a game-changer for us".

Audit Readiness

Given their regulatory obligations, TDA had to undergo financial audits. SoftLedger played a pivotal role in ensuring their financial data was audit-ready. Everything from their crypto transactional history to fiat details was centralized in SoftLedger, making it seamless to share with auditors.

Luis emphasizes SoftLedger's significance during their audit journey: "Having SoftLedger allowed us to have all of our documents and data under a single platform that can be made available to third parties under a ‘view only’ mode”. While discussing the integration of bank feeds and transaction data, he adds, "SoftLedger's centralized approach made it super easy for us to provide auditors with a comprehensive view of our finances".

The Future and Scale

When asked about scaling concerns, Daniel conveys confidence in SoftLedger's capacity to support their growth. He believes the system offers virtually limitless automation potential, which will continue to be crucial for TDA’s accounting practice as the firm continues to grow in trading volume and operational complexity.

Conclusion: TDA’s Message

TDA, as a specialized liquidity provider, offers unmatched prices in the market, priding themselves on best execution. Their rapid growth is a testament to their expertise and commitment. As they continue to expand, the seamless integration and functionality offered by SoftLedger will undoubtedly remain central to their accounting and operational success.

In reflecting on their journey, Daniel offers a piece of advice for businesses exploring similar transitions: "Pick the right tools early on, like SoftLedger, and it will set the foundation for scalable growth".

Luis adds, "SoftLedger didn't just solve our immediate problems; it equipped us for the future".