Celsius Countersues Keyfi Over Theft of Assets

Reading Time: 2 minutes
  • Celsius has countersued Keyfi over alleged theft of millions of dollars
  • Keyfi managed $2 billion worth of crypto assets for Celsius and has been accused of stealing some
  • Celsius accused Keyfi of laundering millions of dollars through Tornado Cash

Bankrupt lending platform Celsius has found enough money in its coffers to file a lawsuit against Keyfi, the Delaware-based limited liability company that it accuses of stealing some of the $2 billion in assets it managed. The lawsuit is in response to action brought by Keyfi against Celsius in July, in which Keyfi founder Jason Stone alleged that Celsius failed to honour a profit-sharing agreement “worth millions of dollars” and lied about its hedging strategy.

Keyfi Practised “Deceit and Conversion”

Celsius’ lawsuit stems from what it calls “the Defendants’ incompetence, deceit and conversion” and aims to have Keyfi “turn over valuable property they stole from Celsius (and ultimately from the whole Celsius community), and to pay damages and restitution for the substantial injuries the Defendants have caused through their flagrant breaches of duty.”

Celsius says that Stone “falsely represented himself as a pioneer and expert in coin staking and decentralized finance” but that instead he and his colleagues “proved themselves incapable of deploying coins profitably, and appear to have lost thousands of Celsius coins through their gross mismanagement”, while also accusing them of stealing millions of dollars from Celsius.

Stone Comes Off Worse in Twitter Discussion

Stone denied this in a tweet thread from the time of the filing of Keyfi’s lawsuit in July, but The Block’s Larry Cermak posted evidence on Twitter yesterday of funds from the Ethereum address Keyfi used to manage them being sent through mixing service Tornado Cash. Stone initially engaged in the conversation, claiming at one point that it “would be smart to do to make it look like me”, before deleting his entire side of the conversation:

Indeed, the Celsius lawsuit claims that Keyfi did just this:

…Stone and KeyFi laundered millions of dollars of Celsius property (or its proceeds) through Tornado Cash on dozens of occasions, and continue to hold property (and its proceeds) of great value that rightfully belong to Celsius.

While of course we don’t know the outcome of these two lawsuits, it seems that Stone and Keyfi are losing the PR battle so far: