Celsius Network Tax Reporting
TokenTax imports Celsius Network data for easy cryptocurrency trade tracking and tax filing.
History of the Celsius Network platform
Celsius Network was founded in 2017 by Daniel Mashinsky and Daniel Leon as a peer to peer (P2P) lending platform based in the United Kingdom. Celsius Network’s mission is to be the bank for the 99% and make the financial system work for the good of everyone.
The platform offers high yield weekly compounded interest accounts for both crypto and gold. A customer can earn up to 12% on a crypto account when it is deposited in their crypto wallet. Customers can also borrow against your crypto assets with no fees, low interest rates, and no credit check.
Celsius Network also offers a payment processing platform which enables users to send and receive crypto via text, link, or through the platform itself using a CelPay account. Celsius Network also does not require a minimum deposit amount, so clients can earn interest whether or not they have $10 or $10 million deposited in their account. Additionally, Celsius Network has the right to margin calls on its platform.
In March 2018, Celsius Network launched their own cryptocurrency, CEL, with an Initial Coin Offering (ICO). The platform also offers a program where you can earn bonus interest on your accounts, lower interest when borrowing against, and prioritized loan approval if a large portion of your crypto assets are made up of CEL token. Celsius also has a partnership with Bitgo to insure up to USD 100 million of crypto deposits.
In 2020, the Celsius Network grew to about a billion USD equivalent worth of crypto deposits and generated approximately USD 8 billion worth of loans. It also grew to over a hundred thousand users and reached profitability in early 2020.
Taxes on crypto lending activity on Celsius Network
Cryptocurrency lending activity is treated similar to lending fiat currency by the Internal Revenue Service (IRS) in the United States. However, it is treated differently depending on whether you are the lender or lessee.
Your interest earnings on your loans of crypto are taxed as income, the same as would be true if you lent your fiat holdings and earned interest on that amount.
Borrowing a cryptocurrency loan, however, may not incur taxes under certain conditions. If the collateral is not sold or exchanged, there is no tax on the crypto loan. However, if there is a margin call that is not met with additional collateral, there are taxes if that collateral is sold or exchanged.
For more information on crypto loans and your individual tax situation, reach out to our team with any questions on our chat function (lower right corner).
FBAR reporting considerations for Celsius Network
Considering that Celsius Network is headquartered outside of the United States, your Celsius Network account may be subject to Foreign Bank Account Report (FBAR) filings if your total foreign account holdings exceeded the minimum FBAR balance requirement at any time throughout the tax year.
Uploading a Celsius Network CSV with TokenTax
In the Celsius Network app wallet screen, tap on Total Wallet balance. If necessary, scroll down and tap See all, and then tap "Send CSV to Email." If you don't see this option, be sure that your app is up to date.
Retrieve the CSV file from your email, and then upload your CSV file to TokenTax.