Celsius bankruptcy saga continues with the co-founder claiming that his stake is "worthless."
Celsius, a bankrupt cryptocurrency lending platform established in 2017, continues its bankruptcy proceedings with one of its co-founders claiming that his equity stake in the company is “worthless.”
According to the documents shared with the United States Bankruptcy Court Southern District of New York, Celsius co-founder S. Daniel Lion confirmed that he is a stakeholder but claimed that his shares are considered worthless.
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Based on the rules declared by the Internal Revenue Service (IRS), the stakeholders often declare that their stakes are worthless when there is a belief that they will not receive “any further distribution for their holdings.”
Moreover, the stakeholder declaring worthlessness must provide clear evidence that the stake had a value at the end of previous years and that certain events caused a loss “in the deduction year.”
Simon Dixon, an online investments platform’s BnkToTheFuture CEO, used Twitter to share his opinion. The CEO claims that by stating stakes as “worthless,” Celsius co-founder aims to “use them as a tax write-off.”
According to sources, Celsius has previously managed to attract two equity funds from investors using BnkToTheFuture.
It is worth remembering that Celsius filed for Chapter 11 bankruptcy on July 13th in the United States Bankruptcy Court for the Southern District of New York.
According to the data shared on August 31st, the company holds over $111 million in cash, claiming that by November, it will have only $42 million.
Moreover, on the same day, a group of 64 custodial-account owners asked the Bankruptcy Court for the Southern District of New York to obligate Celsius to renew withdrawals from custodial accounts. Celsius acted fast on September 1st and filed a motion to allow customers that have Custody or Withhold Accounts worth less than $7,575 to withdraw their funds.