KeyFi CEO Jason Stone has filed a lawsuit against the cryptocurrency platform Celsius, claiming that Celsius did not comply with the agreements and deceived customers using their investments.
According to the KeyFi CEO, the cryptocurrency lender manipulated depositors' funds by promising a loan rate of up to 18%, and as a result, «did not fulfill its obligations.» «The platform has lost hundreds of millions of dollars due to its inability to hedge risks,» Jason Stone said.
KeyFi CEO Jason Stone
KeyFi participated in staking on behalf of the lending platform, implemented DeFi-oriented investment strategies for it, and «generated hundreds of millions of dollars in revenue.» According to the agreements (most of which were verbal), Celsius representatives were supposed to «hedge any volatile losses from the liquidity pools». However, after some time, KeyFi discovered serious irregularities in Celsius' activities, including incorrect accounting of client payments, which led to liabilities of $ 200 million — «Celsius did not even understand what they were doing wrong.»
Due to the inability to fulfill its own obligations and «legally handle customer and partner funds,» the cryptocurrency platform failed to pay KeyFi «a large amount of money.» As a result, Jason Stone filed a lawsuit.
Celsius CEO Alex Mashinsky
It seems that Celsius has entered «dark times» and only law enforcement agencies will be able to understand the cause and effect. At the end of June, we reported that the platform’s asset/equity gap was significantly different from similar credit organizations: Celsius had 19 times less assets than it needed to pay out. Given the company’s CEO’s attempt to flee to Israel and the fact that the company does not trust its own lawyers (whom it had hired a few days earlier to solve the problem), it is likely that Celsius will soon collapse.
