Celsius co-founder files declaration of ‘worthlessness’ in court

Celsius co-founder files declaration of ‘worthlessness’ in court

Daniel Leon co-founder of troubled crypto company Celsius has asked the court to deem “worthless” the entirety of his stock stake in the Celsius Network.
Celsius co-founder files declaration of ‘worthlessness’ in court
Celsius co-founder files declaration of ‘worthlessness’ in court

The legal firm Kirkland & Ellis LLP filed a declaration on behalf of Celsius Co-Founder Daniel Leon in a document to the United States Bankruptcy Court on September 5, confirming his status as a substantial stakeholder and stating that his 32,600 common shares are currently regarded as worthless.

A stock or common share is generally declared to be “worthless” when shareholders believe they won’t get any future payout for their ownership.

If a taxpayer can demonstrate that security had value at the end of the year prior to the deduction year and that an identifiable event resulted in a loss in the deduction year, the IRS deems the security to be worthless.

The troubled cryptocurrency lender stopped accepting withdrawals in June owing to “extreme market conditions,” and one month later filed for Chapter 11 bankruptcy.”

The co-founder of Celsius Network wants to deduct his shares as a tax deduction, according to BnkToTheFuture CEO Simon Dixon, who wrote about the declaration on Twitter on September 5.

Through BnkToTheFuture, Celsius raised two rounds of private equity funding from smaller investors.

The funding runway for Celsius Network looks to have expanded in the meantime. A fresh forecast seems to indicate that the corporation has managed to gain extra breathing room, even though a filing from last month predicted the company would run out of money by October.

According to the most recent prediction, dated August 31 and submitted to the United States Bankruptcy Court on September 6, the company now has little over $111 million in cash and expects to have $42 million by the end of November.