Celsius filed a complaint against Jason Stone, the former head of its staking affiliate, and KeyFi, the company it bought. According to the lender, Stone and KeyFi stole millions of dollars from Celsius through ineptitude.
Celsius sued KeyFi, a cryptocurrency staking company, and its founder for stealing and laundering millions of dollars of cryptocurrency.
Today, the embattled lender filed a lawsuit in the US Bankruptcy Court in the Southern District of New York seeking restitution of property. The complaint claimed that KeyFi founder Jason Stone and KeyFi stole millions of dollars worth of coins from Celsius wallets and transferred them to wallets controlled the defendants. Celsius claims that KeyFi and Stone used Tornado Cash, recently sanctioned by the US Bankruptcy Court for the Southern District of New York, to launder the assets.
Six weeks ago, Stone sued Celsius. Stone accused Celsius of fraud and mismanagement, and claimed it owes money on the basis of hundreds of millions of profits. Celsius purchased a portion of KeyFi in 2020.
Celsius applied for Chapter 11 bankruptcy protection after market volatility caused liquidity problems. The firm was forced to stop withdrawals and entered bankruptcy proceedings.
Celsius claimed it had lent KeyFi coins for stake, but asked for them back later. Celsius requested multiple times, including a formal request by the Celsius board. However, it was able to retrieve the majority of its coins from Stone. But, it claims that there was a “substantial gap.”
According to the filing, Stone’s repeated assurances he could and would return all Celsius’ coins (plus any “profits” due Celsius) were lies meant to hide the fact that he had either lost or stolen substantial amounts of coins.
Celsius claims that KeyFi and Stone bought hundreds of NFTs using Celsius’s coins. This violated the agreement that KeyFi would only hold the tokens until Celsius approves. Stone and KeyFi claimed in their complaint that NFTs were compensation approved by Celsius CEO Alexander Mashinsky.
Celsius claims Stone used mixer Tornado Cash to hide his activities. According to the firm, Stone transferred $1.4 Million from a Celsius wallet via Tornado Cash to wallets that he controlled in September. This was months after he left the company.