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Celsius is suing KeyFi for tens of millions

Celsius accuses KeyFi of theft and mismanagement of funds during their former partnership.

“Many tens of millions” in cryptocurrencies Celsius sued his former partner.

A troubled crypto- lending firm filed a lawsuit today against strategic decentralized finance (DeFi) firm KeyFi and its CEO Jason Stone, claiming KeyFi’s “incompetence, fraud, and conversion” were liable for Celsius losing millions of dollars during their previous partnership. The suit comes a month after KeyFi accused Celsius of fraud.

Celsius alleged in court documents that KeyFi stole tens of many dollars in cryptocurrency from Celsius wallets, used Celsius funds to get hundreds of NFTs as well as “numerous blockchain-related companies,” and laundered the stolen coins through privacy software Tornado Cash.

The crypto lender further claimed that Stone, while presenting itself as a “pioneer” in DeFi instruments at the beginning of the two companies’ partnership, proved “unable to profitably implement the coins” leading to additional losses of “tens of millions of dollars” for the company.

Stone’s personal representative responded to the lawsuit on Twitter, stating that “the compensation KeyFi received (including within the form of NFTs) was expressly authorized by Celsius CEO Alexander Mashinsky” and that the lawsuit “is an attempt to rewrite the history and use of KeyFi and Mr. Stone as a scapegoat for [Celsius’] organizational incompetence.”

Once a number one crypto-lending company, Celsius paused user withdrawals on June 13, citing “extreme market conditions,” and has since filed for bankruptcy. Recent reports claim Mashinsky allegedly used client funds to trade many millions of dollars worth of Bitcoins, outwitting older traders with decades of experience and suffering a loss of $50 million in trading in January 2022 alone.

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