Celsius Network has filed a counterclaim against former contractor KeyFi and its founder Jason Stone. The Block reports.
The crypto lending platform filed a complaint with the United States Bankruptcy Court for the Southern District of New York. It accused the defendant of transferring Celsius-owned coins worth “tens of millions of dollars” to wallets controlled by KeyFi. To conceal his actions, Stone used the Tornado Cash service.
The filing states that Celsius lent coins to KeyFi for staking, but later demanded their return. This was successful for most assets, but a “substantial shortfall” remained, the document notes.
“Subsequent statements by Stone that all Celsius coins (as well as the platform’s ‘profits’ due) would be returned turned out to be false. He attempted to conceal the fact that KeyFi had either lost or stolen the funds,” the filing states.
The document also claims that the defendant purchased “hundreds of NFTs” with Celsius funds. This violated existing agreements. Stone and the company he heads in the Celsius suit stressed that non-fungible tokens as compensation had been agreed with the platform’s CEO, Alex Mashinsky.
Six weeks ago, KeyFi accused Celsius of breach of contract. Stone stressed that the defendant owes his organization “a substantial amount of money.”
KeyFi worked with Celsius from August 2020 to April 2021. The company participated in staking on behalf of the lending platform and implemented DeFi-focused investment strategies for it.
On August 23, the platform also filed suit against Prime Trust seeking the return of about $17 million, which the custodian allegedly did not return. The statement says that the partners terminated the agreement in June 2021, but the defendant refused to transfer 398 BTC, 196,268 CEL, 3,740 ETH and $2.2 million.
“After reviewing the case [Celsius] under the law, Prime Trust was supposed to transfer all property belonging to the platform, including the aforementioned crypto assets,” the document states.
In June, Celsius Network suspended withdrawals, exchanges and transfers between accounts. A month later, on July 14, the platform and some of its “subsidiaries” filed for bankruptcy.
In the same month, the company presented a plan to reorganize the business, focused on the mining division.
According to the latest assessment, the “hole” in Celsius Network’s balance sheet stood at $2.85 billion.
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