- A lawsuit claims that Celsius operated a “Ponzi scheme”
- KeyFi managed Jason Stone has sued the company over unpaid dues
- Stone said that Celcius accused him of stealing funds while managing a $2 billion portfolio
A court filing against lending platform Celsius accused the company of lying to one of its asset managers and operating a “Ponzi scheme”. The case has been brought by KeyFi and its founder Jason Stone and alleges that Celsius failed to honour a profit-sharing agreement “worth millions of dollars” and lied about its hedging strategy. Stone and his associates were charged with looking after almost $2 billion in assets on behalf of Celsius in 2020, but Stone says that the troubled lending platform accused him of theft of assets and then tried to blame KeyFi for an impermanent loss.
Hi all! I’m Jason Stone, and from August 2020 until April 2021, I led the group of talented individuals who managed the 0xb1 address.
— 0xb1 (@0x_b1) July 7, 2022
KeyFi Accused of Stealing Celsius Funds
Stone posted a lengthy Twitter thread on the day that his case, which has been taken by the same law firm that achieved a $100 million payout in the Klieman vs Wright case, was filed, outlining his position. Stone claims that KeyFi was handed up to $2 billion worth of assets from Celsius to manage, all the while being promised that their activities were being hedged.
However, Stone argues that in fact those trades were not hedged and that Celsius had “naked exposure to the market”, and after discovering this, KeyFi wanted out of the relationship. When KeyFi unwound Celsius’ DeFi positions, the company suffered impermanent loss, which Celsius blamed on KeyFi, with Stone saying that Celsius accused him of stealing the assets concerned before later backtracking on this claim.
Celsius Operated “Ponzi Scheme”
Stone argues that Celsius owes KeyFi a “significant sum of money”, and also claims in the filing that Celsius was running an illegal operation:
Prior to Plaintiff coming on board, Defendants had no unified, organized, or overarching investment strategy other than lending out the consumer deposits they received. Instead, they were desperately seeking a potential investment that could earn them more than they owed to their depositors. Otherwise, they would have to use additional deposits to pay the interest owed on prior deposits, a classic “Ponzi scheme.”
Celsius is yet to respond to the claims, but the filing comes at a time when it was just starting to get back on its feet, having yesterday finished paying off a huge loan to Maker, reclaiming $440 million in Wrapped BTC.
