Celsius Co-Founder Claims His Equity Is “Worthless”

Co-founder of Celsius Network has asked the court to deem “worthless” the totality of his ownership holding in the troubled cryptocurrency business.

The legal firm Kirkland & Ellis LLP submitted a declaration to the United States Bankruptcy Court on Monday on behalf of Celsius Co-Founder Daniel Leon, confirming his status as a substantial shareholder 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 a 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.

A month after stopping withdrawals because of “extreme market conditions,” the troubled cryptocurrency lender filed for Chapter 11 bankruptcy in July.

In a Monday Twitter post, CEO of BnkToTheFuture Simon Dixon made the assertion that the declaration renders Celsius Network private equity shares “officially worthless” and that the co-founder intends to claim them as a tax deduction.

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 Tuesday, the company now has little over $111 million in cash and expects to have $42 million by the end of November.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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