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

It’s unclear whether the court statement by Leon will affect the value of the shares still in circulation.

A Celsius Network co-founder has gone to court to declare his entire stake in the controversial cryptocurrency firm “worthless”.

In a statement on Monday before the U.S. bankruptcy court, the law firm Kirkland & Ellis LLP filed a statement on behalf of Celsius co-founder Daniel Leon, confirming his status as a substantial shareholder and stating that its 32,600 common shares are now considered useless.

A declaration that a particular stock or common stock is “worthless” usually occurs when the shareholders of a company believe they will not receive a further distribution for their holdings.

According to the IRS, a stock is worthless when a taxpayer can prove that the security was worth it at the end of the year prior to the deduction year and that an identifiable event caused a loss in the deduction year.

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

Simon Dixon, CEO of BnkToTheFuture, suggested in a Twitter post-Monday 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 gotten longer. While a deposit last month predicted the company to be out of money by October, a new forecast appears to show the company has managed to gain more breathing room. 

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

The latest prediction, dated August 31, was filed with the United States Bankruptcy Court on Tuesday. the $ 111 million in cash and expects it to remain $ 42 million by the end of November.