Crypto Lender Celsius Network Sues Former Partner for Losing “Millions”

On Tuesday, crypto lender Celsius Network filed a legal complaint against asset management firm KeyFi and its Chief Executive Officer (CEO), Jason Stone. The lending company claims the defendants stole assets worth millions of dollars while pretending to be experts in crypto staking and decentralized finance (DeFi) investments

Celsius Says Former Partner Stole Millions

According to the lawsuit, the now-bankrupt crypto lender acquired KeyFi in 2020 on an agreement that the asset manager through Stone would increase Celsius’s profits by providing crypto staking and DeFi-related investment services to the company.

However, Celsius alleges that Stone took an incompetent approach to these services, which allegedly caused the crypto lender to lose millions of dollars. Since he had access to the private keys of Celsius-controlled wallet addresses, the KeyFi CEO withdrew millions of CEL tokens to his own personal wallets without being authorized to do so and then used the stolen crypto assets to buy non-fungible tokens (NFTs) for himself, Celsius claimed.

“Defendants also sold some of the purloined assets for seven-figure returns (which they pocketed). Stone and/or KeyFi also appear to have used Celsius coins to acquire for themselves interests in numerous blockchain-related companies and platforms that they continue wrongfully to hold…

This action arises from the Defendants’ incompetence, deceit, and conversion, and seeks to require the Defendants to turn over valuable property they stole from Celsius (and ultimately from the whole Celsius community), and to pay damages and restitution for the substantial injuries the defendants have caused through their flagrant breaches of duty,” the complaint added.

Stone Sues Celsius

Meanwhile, the lawsuit from Celsius comes a few weeks after Stone filed a legal complaint against the lender, alleging that the company operated a Ponzi scheme and failed to protect customers’ investments by mismanaging their funds. The KeyFi CEO also accused Celsius of failing to keep to its promise of giving him millions of dollars in compensation.

Notably, with the lawsuits, both Celsius and Stone are seeking punitive action against each other. Each party is also seeking compensatory damages funds from the other.