Celsius bankruptcy caused a $67,000  tax bill to one of its customers

In the wake of Celsius Network's bankruptcy last year, one customer was slapped with a $67,000 tax bill for funds lost. This is bringing back some grim memories of wronged investors and leading to new complications for them.

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Prior to Celsius Network's bankruptcy filing last July, Doug Stringer from San Antonio, Texas, invested more than $2.8 million in the company.

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In June last year, a month after the Chapter 11 filing, the platform halted withdrawals. His money was gone. 

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According to Stringer and other Celsius investors, because the Inland Revenue Service (IRS) taxes interest earnings on a 1099 form, they are still liable to pay taxes on funds they have yet to access.

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In a Trade Algo interview, Stringer said he had invested $10 million at one point in one company. As a result, I'm exhausted."

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Private equity worker 63 said he was putting off retirement plans due to the economic downturn.

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During a Ponzi investigation into Celsius, the bankrupt lender misled customers about its business model and artificially inflated the value of its native token in an effort to keep its promises. 

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Investors are unlikely to face capital gains taxes as a result of a collapse in crypto valuations last year. 

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The article highlights further the fact that crypto companies offer lending programs.

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The SEC has scrutinized a "staking" program that promised high returns to investors if they locked in their funds. By locking in funds, investors have been charged high-interest rates.

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He piled more than $200,000 into Celsius based on its double-digit yields on certain offerings, according to Trade Algo.

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He has now been slapped with an $8,000 tax bill because of those high-interest promises.

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According to Trade Algo, Smolkin was "freaking out." He said he was "furious" after losing the entire thing that attracted attention.

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Trade Algo reported that IRS officials were aware of the issue, but declined to comment. Insider was told Thursday morning that the situation remained the same.