Celsius countersues KeyFi, labels the founders “thieves”

Celsius countersues KeyFi, labels the founders thieves

On Tuesday, bankrupt crypto lending firm Celsius countersued Jason Stone and his DeFi company KeyFi in the United States Bankruptcy Court, claiming Stone had allegedly misled the firm by misrepresenting himself as an expert and pioneer in crypto staking and DeFi investments. 

“Unfortunately, Defendants Stone and KeyFi, Stone’s majority-owned corporate vehicle, proved themselves incapable of deploying coins profitably and appear to have lost thousands of Celsius coins through their gross mismanagement,”

said Celsius.

“But the Defendants were not just incompetent, they also were thieves.”

Celcius accused the company of stealing coins worth millions of dollars from its wallets. Additionally, Stone and KeyFi bought NFTs with Celsius tokens and transferred them to their own wallets, eventually making profits in seven figures. 

Along with the NFTs, KeyFi bought an interest in several blockchain companies, which they continue to hold, and used Tornado Cash – the crypto mixer recently banned by the U.S. government – to hide the trails. 

Due to the negligence, Celsius claimed it lost “many tens of millions of dollars.”

Further, KeyFi refused to return the funds when requested and instead made fatuous claims against Celsius on public forums.

KeyFi, which was acquired by Celsius in 2020, used to provide staking services and DeFi investment advice to Celcius. 

The lawsuit comes after KeyFi sued Celsius on July 7 for failing to honor a “handshake agreement” for profit-sharing. Days later, Celsius filed for Chapter 11 bankruptcy. 

According to KeyFi, Celsius used funds to “manipulate crypto asset markets, had failed to institute basic accounting controls which endangered those same deposits and had failed to carry through on promises.”

In a separate event, Celsius Network has also sued custodian Prime Trust. The lawsuit, filed on Tuesday in the same court, alleged that Prime Trust failed to return $17M worth of crypto assets when it terminated its relationship with Celsius in June 2021. 

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About the Author
Himan Mohapatra
Himan Mohapatra
Himan Mohapatra is a crypto and NFT focused writer for Coinmash. He is passionate about finance and disruptive tech, such as blockchain. One can find him playing Valorant or FIFA when away from his desk.