Celsius Accuses KeyFi Of Not Only Incompetent But A Thief

Celsius has countered KeyFi and its CEO Jason Stone, accusing Stone of misrepresenting himself as an expert in DeFi, and that Stone and KeyFi mined the Celsius coin through incompetence and fraud.

Crypto lending platform Celsius filed a countersuit in United States Bankruptcy Court on August 23 against Jason Stone and his company KeyFi. In the filing, Celsius alleges Stone falsely represented himself as a pioneer and expert in coin staking and decentralized finance (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,(…). But the Defendants were not just incompetent, they also were thieves.”

Lending platform said

According to the Celsius countersuit, Stone and KeyFi took millions of dollars’ worth of coins from wallets under this lending platform’ control and transferred them to wallets they owned. Additionally, the lawsuit claims that Stone purchased hundreds of NFTs using Celsius currencies and transferred them to their own wallets.

Non-fungible tokens, or NFTs, are cryptographically distinct tokens that are connected to digital (and occasionally physical) material to prove ownership.

“Stone and/or KeyFi also appear to have used Celsius coins to acquire for themselves interests in numerous blockchain-related companies and platforms that they continue wrongfully to hold,”

The countersuit wrote

Stone, which KeyFi Celsius acquired in 2020, filed a lawsuit against this platform in July, alleging that Celsius had broken its contract. According to the lawsuit, KeyFi, this platform “manipulate crypto asset markets, had failed to institute basic accounting controls which endangered those same deposits and had failed to carry through on promises.”

A month after ceasing all customer withdrawals and swaps due to liquidity problems, Celsius filed for Chapter 11 bankruptcy protection in the same month, causing regulators from Alabama, Kentucky, New Jersey, Texas, and Washington to launch investigations.

The countersuit also alleges that Stone used the sanctioned Tornado Cash mixing service to obfuscate his transfers’ origin, destination, and counterparties. The suit alleges that Stone sent $1.4 million through Tornado Cash in September 2021.

In the countersuit, Celsius asked for the court to approve several requests, including the turning over of “withheld property” that may have come into the defendants’ possession. Awarding damages, including for what Celsius calls “KeyFi and Stone’s tortious, willful and malicious conduct.”

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