Last Updated on August 24, 2022 by Bitfinsider

In a lawsuit filed on Tuesday, Celsius Network LLC claimed that a former money manager misled the company about his investing skills and misplaced or stole assets worth tens of millions of dollars.

Jason Stone, the founder of Keyfi Inc., is accused of lying about his ability to invest and of being poor in the management of Celsius assets. Keyfi filed for bankruptcy last month after freezing customer assets. Additionally, Stone was charged with outright theft by the crypto lender.

According to the complaint, Stone started overseeing Celsius’ financial operations in 2020. Just a few months after the agreement started, Celsius demanded the return of the coins under Stone’s custody because he was dissatisfied with Keyfi’s reporting methods. According to the lawsuit, Celsius was unable to recover all of the assets and discovered Keyfi was “extraordinarily poor” at cryptocurrency investing and neglected to protect against price fluctuations.

As stated in the complaint, “The Defendants’ liability to Celsius is staggering.” The business asserts that Keyfi turned Celsius assets into non-fungible tokens and stole them, hiding its tracks via a so-called crypto mixer that was just outlawed by the US Treasury Department. This is in addition to mismanagement and fraud.

The accusations follow Stone’s lawsuit against Celsius last month, in which he charged the cryptocurrency lender with defrauding him of possibly hundreds of millions of dollars in income.

According to Stone’s lawyer, Kyle Roche, said in a statement: “As alleged by KeyFi in the complaint it filed last month, the compensation that KeyFi received (including in the form of NFTs) was expressly authorized by Celsius’s CEO Alexander Mashinsky. Celsius’s most recent filing is an attempt to rewrite history and use KeyFi and Mr. Stone as a scapegoat for their organizational incompetence.”

Celsius Network LLC, 22-10964, US Bankruptcy Court for the Southern District of New York, is the name of the bankruptcy case.

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