Former Celsius contractor KeyFi Inc. – sued the landing platform, accusing it of refusing to fulfill its contractual obligations. The company’s founder, Jason Stone, stressed that the defendant owed “significant amounts of money” to his organization.

You can find a copy of the file here. I hope this sheds some light on not just the history of 0xb1 but how it was made. @CelsiusNetwork has generally conducted itself over the past few years. https://t.co/FNHs7fDb3B

— 0xb1 (@0x_b1) July 7, 2022

“Given the public speculation about the company’s bankruptcy and my observations of Celsius’ lies, I think it would be wise to finally clarify the situation. To resolve this issue definitively, I have sued Celsius,” Stone wrote.

KeyFi worked with Celsius from August 2020 to April 2021. The company stakes on behalf of the lending platform and implements DeFi-focused investment strategies for it.

KeyFi “made hundreds of millions of dollars in profits” during this period, according to the lawsuit. Celsius, in turn, committed itself to risk management – ​​trading teams needed to “protect non-permanent losses from activity in liquidity pools.”

Stone said that at one point KeyFi managed the $2 billion Celsius asset, but the parties “worked without a formal written agreement for most of that time.”

“We learned that we had been scammed at the end of February 2021. They did not protect our operations, they did not protect the price fluctuations of crypto assets. There was no collateral in the entire portfolio of the company,” he said.

He found other serious violations, including in terms of accounting.

“Stone has learned of numerous cases where the defendant’s failure to maintain basic accounting records has jeopardized clients’ funds. […] “Central’s misrepresentation of certain payments it owed customers resulted in a liability of $200 million that the company did not know and did not understand why it had to make it,” the lawsuit says.

In March 2021, KeyFi decided to terminate its relationship with the landing platform. Stone said Celsius has been trying to resolve the issue for more than a year, as he owes his company “significant amounts of money”.

Unable to receive compensation, the plaintiff went to court. He accused Celsius of market manipulation, mismanagement and a Ponzi scheme:

“As customers tried to withdraw their ETH holdings, Celsius had to buy cryptocurrencies at high prices on the open market, resulting in heavy losses. Faced with a liquidity crunch, Celsius began offering double-digit rates of return to attract new depositors whose funds were used to repay the positions of previous investors and lenders.”

KeyFi requests the return of the assets owed to it and the compensation, the amount of which will be determined during the trial.

Earlier, there were media reports about investment bank Goldman Sachs’ plans to raise $2 billion to buy Celsius assets.

Recall that Georgetown University law professor Adam Levitin described the platform’s bankruptcy as almost inevitable.

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