Crypto Lending Platform Celsius Files Countersuit Against KeyFi

U.S Court Appoints Independent Examiner in Celsius Case
  • About a month ago, KeyFi claimed that Celsius had scammed it out of money.
  • Celsius suspended client withdrawals on June 13.

Celsius has filed a countersuit against its ex-partner. Celsius, a cash-strapped crypto lending organization, has filed a lawsuit against KeyFi, a DeFi strategy firm, and its CEO Jason Stone, alleging that millions of dollars were lost due to KeyFi’s “incompetence, deceit, and conversion” during the two companies’ prior relationship. About a month ago, KeyFi claimed that Celsius had scammed it out of money.

According to court filings made by Celsius, KeyFi stole tens of millions of dollars worth of cryptocurrencies from Celsius wallets, used the monies to purchase hundreds of NFTs and “numerous blockchain-related companies,” and then laundered the coins via the anonymity platform Tornado Cash.

Exchanging Accusations

The crypto lender further alleged that despite Stone’s initial presentation of himself as a “pioneer” in DeFi instruments, he ultimately demonstrated himself “incapable of deploying coins profitably,” resulting in additional losses of “many tens of millions of dollars” for the company.

On Twitter, Stone’s lawyer responded to the lawsuit by saying that “the compensation that KeyFi received (including in the form of NFTs) was expressly authorized by Celsius’s CEO Alexander Mashinsky” and that the lawsuit was “an attempt to rewrite history and use KeyFi and Mr. Stone as a scapegoat for [Celsius’] organizational incompetence.”

Celsius, a once-prominent cryptocurrency lending platform, suspended client withdrawals on June 13 claiming “extreme market conditions,” and has now filed for bankruptcy. Reports suggest that Mashinsky may have lost $50 million trading Bitcoin in January 2022 alone, after reportedly using client cash to trade hundreds of millions of dollars’ worth of Bitcoin against the advice of professional traders with decades of expertise.

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A diploma graduate who is passionate about digital currency and loves writing. He loves the concept of crypto and keeps himself up to date with the latest development and news of the crypto world.