No products in the cart.
- Latest
- Trending
ADVERTISEMENT
KeyFi Inc, a DeFi staking software development company, Submission A lawsuit against the embarrassed cryptocurrency lender Celsius Network over allegations of fraud. The company also claims to have been operated in a Ponzi-like way.
KeyFi CEO Jason Stone revealed this in a long Twitter thread on July 7th.
According to Stone’s thread, Celsius refused to respect the terms of the 2020 contract, which will help crypto lenders manage and invest their clients’ funds.
KeyFi had not signed a formal written agreement with the Celsius Network until January 2021, according to a review of the filings with the court. However, since August 2020, the company has been working as a Celsius investment manager under a special purpose company called Celsius KeyFi.
At the peak of the partnership, KeyFi helped Celsius manage $ 2 billion in user funds, with over $ 800 million in assets under management as of April 2021.
Stone revealed that Celsius lied to him in February 2021 about hedging KeyFI’s investment activities. According to him, he discovered that Celsius was “naked in the market.”
However, in late February 2021, he discovered that Celsius was lying to us. They did not hedge our activity, nor did they hedge fluctuations in crypto asset prices. The company-wide portfolio was exposed naked to the market.
0xb1 (@ 0x_b1) July 7, 2022
He continued that this forced him to end his company’s agreement with Celsius, which led to the rewinding of some DeFi positions and a permanent loss for crypto lenders.
According to Stones, Celsius initially accused him of stealing him and ignored the loss as a result of a hedging failure against the risks of Keefi’s trading strategy.
In a court petition, the Celsius Network claimed to have been operating in a pongee-like manner by attracting new depositors at “double-digit interest rates.”
According to the filing
Celsius continued to market himself as a transparent, well-capitalized business, but in reality it became a Ponzi scheme.
Filing also said Celsius is actively using customer funds to operate the crypto market.
(Celsius) Profiting by actively (using) the client’s funds to manipulate the crypto asset market. The worst example of this was the plaintiff’s discovery that Celsius used a customer’s Bitcoin deposit to inflate a unique crypto asset called the “Celsius Token” (CEL).
The crypto community took these new revelations seriously, as Nansen engineer Andrew T said Stone’s Twitter thread filled the lead.
If you believe, this thread fills the lead https://t.co/qQ3ZUoHUro pic.twitter.com/GJfhGQ1pql
Andrew T (@Blockanalia) July 7, 2022
Another community member, Dylan Leclair, referred to court filings stating that Celsius was acting as a Ponzi scheme.
Celsius acted as a Ponzi scheme. pic.twitter.com/pGC8vrH3a0
DylanLeClair (@DylanLeClair_) July 7, 2022
According to Stone’s Twitter thread, Celsius is obliged to pay “a large amount of money to KeyFI.” He also said he tried to resolve this impasse several times with little success.
I have been quietly trying to resolve this dispute with Celsius for over a year. According to the contract Celsius has signed with KeyFi, they owe a lot of money to KeyFi. We were more than rational to try to solve this with them.
0xb1 (@ 0x_b1) July 7, 2022
Court filings have shown that KeyFI is expected to earn 7.5% to 20% of its profits, depending on its investment strategy.
In another development, Celsius moved about 25,000 units of wrapped Bitcoin (WBTC) to the major crypto exchange FTX.
Members of some crypto communities speculate that the transfer of funds may precede a large market dump.
Freed from repayment of the remaining DAI loans, 21,962WBTC has already found its way to FTX …
It didn’t take long …
Incoming call $ BTC garbage? https://t.co/A9B9YaLQ1W#CelShortSqueeze = = #CelPumpAndDump
Not your key, not your cipher pic.twitter.com/V2edblhmXZ
Airdawg (@Colwellinvestor) July 7, 2022
Others believe that a perplexed company can exchange wrapped Bitcoin for a major asset, allowing the company to resume withdrawals.
The transfer of funds took place after the cryptocurrency lender successfully paid its debt to the Maker Protocol.
Since he broke the radio prayer on June 30, the company and its CEO Alex Mashinsky have not yet released a new update on when the withdrawal will take effect on the platform.
