Billions in bitcoin trapped on lending platforms like Celsius may turn into a tax writeoff for investors
Summary
Crypto lending platforms like Celsius, Anchor, and Voyager Digital rose to prominence for offering almost unbelievable returns of up to 20% annually on customer deposits. In the wake of its own solvency crisis, Celsius — which is still advertising up to 18.63% annual yield on its website — has had customer funds on ice for more than three weeks and has yet to announce tangible guidance on next steps. Unlike the traditional banking system, which typically insures customer deposits, there arent formal consumer protections in place to safeguard user funds when things go wrong on decentralized finance platforms. So to the extent that crypto was loaned to a platform, that criteria is met," said Taub, who is the director of tax services at Berkowitz Pollack Brant, one of the largest public accounting firms in Florida. Neither Voyager nor BlockFi clearly describe the relationship that the user has with the platform, according to Chandrasekera, who tells CNBC that they may have left it vague, because they dont want to get into it with the Securities and Exchange Commission.
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