The troubled crypto lending firm Celsius has recently filed a lawsuit against its former partner decentralized finance (DeFi) strategy company KeyFi and its CEO Jason Stone.
A month prior to this lawsuit, KeyFi accused Celsius of defrauding it.
Celsius claimed that KeyFi’s “incompetence, deceit, and conversion” has caused the firm to lose millions of dollars during their previous partnership.
According to some court documents, Celsius alleged that KeyFi stole hundreds of NFTs and “several blockchain-related companies” using the funds from Celsius, then used said funds to launder the stolen coins through anonymity software Tornado Cash.
The crypto lender went on to say that — while KeyFi’s CEO presented himself as a “pioneer” in DeFi instruments during the initial partnership of the two firms — he has since revealed himself to be “incapable of deploying coins profitably, which had led to additional losses for the company of “many tens of millions of dollars.”
The lawsuit is addressed by Stone’s legal representative on Twitter, who stated that the suit was an attempt to change the past narrative and using KeyFi and Mr. Stone as scapegoats for Celsius’ “organizational incompetence.”
The attorney commented that “the compensation that KeyFi received (including in the form of NFTs) was expressly authorized by Alexander Mashinsky (Celsius’s CEO)”.
Celsius, formerly a leader in the crypto lending market, has halted customer fund withdrawals on June 13 due to “extreme market conditions”, and subsequently filed for bankruptcy.
According to recent allegations, Mashinsky presumably utilized client funds to trade Bitcoin worth hundreds of millions of dollars, bypassing senior traders with decades of experience, and took a trading loss valued $50 million in just a month in January 2022.
