Celsius Accused Of Fraud In A Lawsuit Filed By A Former Money Manager.

Celsius, according to Jason Stone’s KeyFi Inc, acted unlawfully and owes the company money from a profit-sharing agreement. In a case filed on Thursday, Stone referred to Celsius as a Ponzi scam.

A former Celsius contractor has submitted a lawsuit against the struggling crypto lender, accusing it of mismanagement and fraud and claiming hundreds of millions of dollars in earnings.

According to a filing in New York state court on Thursday, KeyFi Inc., a firm formed by Jason Stone, accused Celsius of fraud and owing KeyFi millions of dollars from a profit sharing arrangement. During the year 2021, Stone worked at Celsius Network.

Here’s an excerpt from the suit:

“From August 2020 through March 2021, Plaintiff generated hundreds of millions of dollars in profits for the parties’ mutual benefit. Those profits came in the form of transaction fees, rewards for staking tokens, and other appreciating assets. As in any investment relationship, Plaintiff and Stone were responsible for generating a profit on the funds provided to them, while Celsius was responsible for ensuring that its investment strategies would not prevent it from repaying its depositors in kind.”

Twitter user 0xb1 said “given the public speculation about the company’s solvency, and my observation of Celsius’ loose relationship with the truth, I feel it is only prudent to finally set the record straight. I have brought legal action against Celsius to settle this issue once and for all.”

According to Stone’s post, KeyFi Inc worked with Celsius between August 2020 and April 2021, establishing and installing DeFi approaches for the lending platform. According to the filing on Thursday, KeyFi “generated hundreds of millions of dollars in profits for the mutual benefit of the parties” throughout this time.

According to the lawsuit, Celsius told Stone that its risk management team was monitoring its activity and that their trading teams were “adequately hedging any potential impermanent loss from our activities in liquidity pools.”

According to the post and the filing, the company misled to KeyFi about this, with Stone’s firm stating Celsius’s portfolio had “naked market exposure.”

The filing goes on to assert that the company sustained significant losses during the 2021 crypto bull run, which began in January 2021, because it failed to hedge its investments irresponsibly and fraudulently.

It goes on to say that as the lender faced a liquidity issue, it began offering high interest rates in order to “lure new depositors,” resulting in a Ponzi scheme.

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