Celsius Updates on Customer Rewards Amid Bankruptcy

Celsius Addresses Customer Rewards and Bonuses

Celsius, the bankrupt cryptocurrency lender, recently provided updates regarding customer rewards, bonuses, and promotions. The company clarified that customers had no control over these incentives distributed between the pause date and the Chapter 11 bankruptcy filing date. This announcement comes as part of Celsius’s efforts to revisit its tax compliance obligations.

Reissuing 1099-MISC Forms

As part of its compliance review, Celsius will be reissuing and mailing 1099-MISC forms to certain customers shortly. This action follows a reassessment of reward payments, where the company adjusted the calculation dates from July 14, 2022, to June 12, 2022. These updates may lead to discrepancies in the reward figures initially shown on the forms issued in January 2023.

Tax Compliance and Data Validation

Celsius emphasized that the forms would not be marked as “corrected” because the revised values were not submitted to the IRS. The company plans to submit only those amounts meeting the IRS $600 threshold. This move aims to ensure accurate reporting and compliance with tax regulations.

Background of Celsius's Financial Struggles

The updates come in the wake of Celsius's financial turmoil, marked by a suspension of withdrawals, swaps, and transfers due to severe market conditions. Speculations about insolvency arose following the collapse of the Terra and LUNA ecosystems. Faced with liquidity challenges, Celsius announced significant workforce reductions on July 3, 2022, before ultimately filing for bankruptcy on July 13, 2022.

These measures reflect Celsius's ongoing efforts to navigate its financial crisis while addressing customer concerns and regulatory requirements.