- Stone has been seeking to settle “a significant sum of money” that Celsius owes KeyFi.
- Stone claimed that the DeFi account 0xb1 was handling roughly $2 billion in assets.
Jason Stone, a DeFi entrepreneur and CEO of KeyFi, Inc., is suing Celsius, a crypto lending platform, for allegedly failing to fulfil its contract. Damages “to be determined at trial” is the amount Stone is asking for in his lawsuit. KeyFi claims Celsius exploited client money 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 complaint filed Thursday in New York.
Trouble Continues For Celsius
At one time, Stone claimed that the DeFi account 0xb1 was handling roughly $2 billion in assets for Celsius and that the firm “assured” him that it was adopting proper risk management procedures such as “hedging any potential impermanent loss from our activities in liquidity pools.”
An impermanent loss is caused when the value of tokens in a liquidity pool drops compared to their original value. Decentralized exchange fees paid out to liquidity providers may offset losses if traders exit in the interim. Stone, on the other hand, believes that Celsius’s promises were hollow.
According to the complaint, Stone also found that Celsius “did not even understand how or why it owed” a purported $200 million debt. Stone and the 0xb1 team decided to part ways with Celsius a few weeks later, in March 2021. However, Celsius is said to have incurred a short-term loss due to the leaving process. For over a year, Stone has been seeking to settle “a significant sum of money” that Celsius owes KeyFi.
Although KeyFi apparently generated millions of dollars for Celsius and its clients, the complaint alleges that Stone and KeyFi “operated without any formal written agreement.”
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