Are you a cryptocurrency investor facing a surprising tax bill on frozen funds? You're not alone. Former customers of collapsed crypto companies such as Celsius Network and Voyager Digital reportedly face the possibility of paying income tax on funds still held by these platforms. Even though several investors lost their life savings in 2025, investors are getting tax bills for their frozen holdings at Voyager Digital and Celsius. This also comes at a difficult time when many are still reeling from market volatility.

Cryptocurrency Investors and Frozen Funds: A Taxing Situation

But in a quirk of last year’s crypto collapse, investors are now receiving tax bills for money locked up on platforms like Celsius and Voyager Digital, which have frozen customer assets. But in a quirk of last year’s crypto collapse, investors are now receiving tax bills for money locked up on platforms like Celsius and Voyager Digital, which have frozen customer assets. What caused the cryptocurrency market cap to plummet? The ripple effects are still being felt, especially in the form of unexpected tax liabilities.

Understanding the Tax Implications of Frozen Crypto Assets

The question is, how can you be taxed on assets you can't access? The IRS may view the initial investment in a now-bankrupt platform as a taxable event, particularly if you previously reported it as income or a capital gain. Then, we will address taxpayers’ federal income tax considerations as a result of bankruptcy filings by a cryptocurrency exchange. This means understanding the specific rules and regulations surrounding cryptocurrency taxation is crucial.

What Can You Do if You're Facing a Tax Bill on Frozen Crypto?

Navigating this complex situation requires professional guidance. Consult with a qualified tax advisor or accountant who specializes in cryptocurrency taxation. They can help you understand your specific situation, explore potential deductions or offsets, and ensure you comply with all applicable tax laws.