By
Chimamanda U. Martha
February 8th, 2024
The current lawsuit casts a shadow of more doubt over the survival of Celsius network.
An ex-employee of Celsius has accused the crypto lender of lies, malicious acts, mismanagement of funds, and fraud among other things. According to a legal filing, DeFi aggregator KeyFi Inc., alleges that Celsius is fraudulent and the firm is refusing to pay up the owed debt.
‘Celsius Lied to Us’ – CEO KeyFi
In a follow-up to the court filing, Jason Stone, the co-founder and CEO of KeyFi, took to his Twitter to shed more light on what transpired between both parties.
According to Stone, KeyFi was handling a part of Celsius’ customer deposits at one point. That is, from August 2020 through March 2021. In that period, his firm created DeFi strategies for the lender, managing at least $2 billion worth of assets for it.
The partnership, however, took a wrong turn when KeyFi discovered that its partner was not working per their agreement. Stone claims that Celsius’ risk management team did nothing to hedge against market fluctuations. In fact, they lied about it. The CEO wrote in part:
“Celsius had lied to us. They had not been hedging our activities, nor had they been hedging the fluctuations in cryptoasset prices. The entire company’s portfolio had naked exposure to the market.”
By March, KeyFi informed Celsius that it was backing out of the business arrangement. But now it claims Celsius has refused to pay for services rendered. This is despite generating hundreds of millions of dollars in profits together with the lender.
Fresh Air of Uncertainty
The current lawsuit casts a shadow of more doubt over the survival of the Celsius network. And this might be because of some strong choice of words that the defendant used in this lawsuit against Celsius. Some of them are”fraud” and a ” Ponzi scheme.”
Also recall, that withdrawals are yet to return to the platform since June 12 when Celsius announced it was halting them. Although, there have been reports that the company is now restructuring and some companies are beginning to indicate interest in buying out its assets. Goldman Sachs, for instance, is reportedly offering $2 billion to buy out the company’s assets.
Nonetheless, too many unanswered questions linger but the most common now is whether or not customers will ever regain access to their funds.