KeyFi’s Jason Stone KeyFi as on Stone of KeyFi suit against Celsius in which it claimed KeyFi claimed that Celsius had a debt to KeyFi “millions of dollars,” and then Celsius has responded by filling suit against KeyFi as well as Jason Stone for the mismanagement and loss of client funds.
The complaint identifies KeyFi as well as Stone as “extraordinarily inept at the investment strategies they were undertaking.”
The legal complaint asserts that Stone was granted access to private keys for a privately owned wallet, which is referred to by the code “0xb1.” Said wallet was created to permit Stone to control Celsius’ DeFi strategy as per the terms agreed upon between the parties.
But, Celsius alleges that Stone made use of the funds to purchase CryptoPunk, Bullrun Babes, and a plethora of other NFTs during February of 2021. They paid an amount of 1,070 ETH. Stone then traded four of the CryptoPunks for 1,071 ETH, before transferring the funds to Tornado Cash. A large portion of the NFTs bought from Stone were also reported to have been moved from accounts owned by Celsius to a fully-controlled wallet by Stone.
Celsius asserts that Stone did not have the authorization to buy NFTs using Celsius’s funds. The complaint further states that Stone might have done this since the latter had been “aware that transfers of NFTs in and out of the Wallets would not be visible to Celsius through the operative dashboards.”
The suit reveals that Stone utilized a mix of NFT purchases and Tornado Cash to siphon money from Celsius wallets, without triggering internal alarms.
Kyle Roche, a founding partner of Roche Freedman who represents Stone, reacted by stating Stone’s NFT purchase was “authorized by Celsius’s CEO Alexander Mashinsky.”
When Celsius cut connections with Stone the company retracted money from the 0xb1 account because Stone was still able to access key private information. However, the wallet was able to receive a $1.4 million DAI airdrop in September 2021. The money was then it was allegedly taken by Stone and then laundered through Tornado Cash together with an additional 320 Ethereum.
Stone lost more than $50 million of Celsius funds
In addition to the accusations that theft was involved, Celsius says that Stone lost more than $50 million of Celsius funds due to an inefficient DeFi transaction “after a sharp fall in the price of ETH.” The account ended on the 23rd of February 2021 the day that Ethereum fell between 24% and $1,355, then rebounded to $1,576 and closed the day with only 10 percent.
In addition to other allegations, Celsius also alleges that Stone Invested in Nifty, the NFT platform Nifty which is owned by Celsius. Celsius asserts it should receive its share of Nifty in the settlement.
The complaint does not specifically state that the money that was allegedly taken by Stone was the property of clients, the complaint does mention it was Celsius is “laser-focused on recovering the balance for the benefit of its customers.”
The statement states that it is in the customers’ best interest to retrieve the money from the 0xb1. Although the statement could refer to ensuring that Celsius had enough liquidity to function, however, the funds probably belonged to Celsius customers.
Celsius appears to be trying to collect any and any money owed to it. It also filed a lawsuit with Prime Trust for roughly $17 million on Tuesday.
Source: https://www.thecoinrepublic.com/2022/09/25/celsius-sued-kefi-claims-jason-stone-stole-over-1000-eth/