One of Celsius Network’s co-founders has filed a court motion seeking to have the whole of his investment in the troubled cryptocurrency startup declared worthless.
Most of the time, shareholders say that a certain stock or common share is valueless when they think they won’t get any more dividends for their holdings.
The IRS considers a stock to be worthless if a taxpayer can demonstrate that the security had value at the end of the year before the deduction year and that a determinable event produced a loss in the deduction year.
David Leon Declares His 32,600 Common Shares as Being Worthless
One month after temporarily banning withdrawals due to extreme market circumstances, the beleaguered cryptocurrency lender filed for Chapter 11 bankruptcy protection in July.
Celsius Co-Founder Daniel Leon had his legal representation, Kirkland & Ellis LLP, submit a statement with the United States Bankruptcy Court on his behalf on September 5. The report affirms his position as a significant stakeholder and claims his 32,600 common shares are deemed worthless.
In a message on Twitter on September 5, the CEO of BnkToTheFuture, Simon Dixon, suggested that the statement indicates that Celsius Network’s private equity shares are now “officially worthless” and that the co-founder intends to utilize them as a tax write-off.
By using BnkToTheFuture, Celsius successfully secured two rounds of private equity funding from a variety of smaller investors. During this time, Celsius Network’s financial runway has increased in length. A file from the previous month predicted that the firm would run out of money by October. Still, a revised prediction indicates that the corporation may have secured some more financial cushion.
According to the most recent projection, completed on August 31 and submitted to the United States Bankruptcy Court on September 6, the company currently has just over $111 million in cash. It anticipates having just $42 million cash remaining by the end of November.
It is not apparent if the court statement made by Leon will have any effect whatsoever on the value of the shares currently being traded.
