Celsius Files Lawsuit Against KeyFi: Claims Millions Stolen From its Wallets 

Last month, KeyFi, a DeFi startup, filed a suit against Celsius, its business partner. Now, responding to that, Celsius has filed a lawsuit against KeyFi CEO Jason Stone for laundering crypto worth millions of dollars.

Celsius filed a complaint against Stone on Tuesday, August 23, 2022, in Manhattan. The lawsuit alleges Stone of falsely portraying himself as an expert and pioneer in DeFi investments and crypto staking. Stone is also referred as incapable and was accused of “gross management” since Celsius lost digital assets because of it. 

In its lawsuit, Celsius also called the defendants as thieves and not just incompetent. Stone and KeyFi are accused of stealing millions of dollars from Celsius wallets, manipulating crypto assets to steal and buy non-fungible tokens (NFTs) and keeping seven-figure returns. 

Here’s What Happened

As per the court documents, Stone managed Celsius’ crypto asset investments in the period between August 2020 to March 2021. In addition to the above-mentioned claims, Celsius also accused the parties of using Tornado Cash, a recently-sanctioned crypto mixer for hiding their tracks.

It further stated that at various instances Stone and KeyFi have stolen Proceeds or Celsisus property worth millions of dollars using Tornado Cash. Celsius‘ lawsuit against KeyFi is in response to the DeFi startup’s acquisition that it failed to honor a profit-sharing agreement in a July 7 lawsuit. Celsius was also accused of manipulating the crypto asset market to their benefit and also that it spent customer bitcoin deposits for inflating its CEL token. 

During September 2020 and September 2021, the price of CEL rose by 1,770% in parallel to Bitcoin. However, the token has dropped by 66% this year so far, though it has recovered some losses since Celsius’ withdrawal freeze in June. 

Celsius demands the return of its property and damages to be paid because of the breaches of duty, while KeyFi is pursuing similar relief. Kyle Roche, the lawyer of Stone, said on Twitter that the compensation received by KeyFi, including NFTs, was “expressly authorized” by Alex Mashinsky, the CEO of Celsius. 

Roche said that the most recent filling of Celsius was an attempt to change history and use KeyFi and Stone as the fall guy for their organization’s inability.

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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