Celsius co-founder declares his equity is ‘worthless’ in court

CoinTelegraph September 7, 2022
Updated 2022/09/07 at 4:51 PM
3 Min Read

A Celsius Network co-founder has moved in court to declare the entirety of his equity stake in the embattled crypto company[1] as “worthless.”

In a Monday document to the United States Bankruptcy Court, law firm Kirkland & Ellis LLP filed a declaration on behalf of Celsius Co-Founder Daniel Leon, confirming his status as a substantial shareholder and declaring that his 32,600 common shares are now considered worthless.

A declaration that a particular stock or common share is “worthless” generally occurs when shareholders in a company think they will not receive any further distribution for their holdings.

According to the IRS, a stock is worthless when a taxpayer can show the security had value at the end of the year preceding the deduction year and that an identifiable event caused a loss in the deduction year.

The embattled crypto lender filed for Chapter 11 bankruptcy in July, a month after halting withdrawals due to “extreme market conditions.”

BnkToTheFuture CEO Simon Dixon suggested in a Monday Twitter post that the declaration means that Celsius Network private equity shares are now “officially worthless” and that the co-founder wants to use them as a tax write-off.

Celsius raised two rounds of private equity funds from smaller investors via BnkToTheFuture.

Meanwhile, Celsius Network’s cash runway appears to have stretched. While a filing last month forecasted the company to be out of money by October[9], a new forecast appears to show the company has managed to get more breathing room.

Related: Law Decoded, Aug. 29–Sep. 5: Celsius is ready to give money back, but not much[10]

The latest forecast, dated Aug. 31 and filed to the United States Bankruptcy Court on Tuesday. has the firm sitting on just over $111 million in cash currently, forecasting $42 million cash left by the end of November.


This article was first published on Cointelegraph.com

Share this Article