Bankrupt lender Celsius countersues KeyFi

Celsius countersues decentralised finance (DeFi) protocol KeyFi and its CEO

KeyFi CEO's lawyer lambasts countersuit - Photo:Shutterstock

Celsius, the bankrupt crypto lender, has countersued the decentralised finance (DeFi) protocol KeyFi and its CEO, Jason Stone, in the United States Bankruptcy Court. 

It claims that Stone misrepresented himself as an expert in the DeFi space and that both he and KeyFi lost Celsius tokens through deceit and incompetence.

The Celsius suit alleged that KeyFi, which has itself sued the lender for failing to honour a profit-sharing agreement, stole millions of dollars in coins from Celsius wallets.

It accuses those behind the protocol of acquiring interests in other crypto-related companies with Celsius coins, hiding their activity by using Tornado Cash, a c ryptocurrency privacy protocol that was recently banned by the US Treasury Department. 

The suit also claims that KeyFi purchased nonfungible tokens (NFTs) with Celsius coins without Celsius’s permission and then transferred them to its own wallets to sell for “seven-figure returns (which they pocketed).”

Taking specific aim at KeyFi Jason Stone, the suit alleges that the CEO began the suit against Celsius in an attempt “to score a public reactions victory before his extraordinary misconduct could be exposed.”

It continues: “The story spun by KeyFi in its complaint and by Stone on Ttwitter is a fantasy. In reality, and as Celsius can readily prove, defendants are liable to Celsius in staggering sums based on their incompetence, conversion, false representations and other breaches of duty.”

Stone’s lawyer, Kyle Roche, dismissed the countersuit, arguing that the NFTs received by KeyFi were “expressly authorised 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 has filed for bankruptcy protection and allegedly owes its creditors billions. It told creditors earlier this month that it probably had enough money to fund its operations until the end of the year,

By 17:00 (UTC+1) on 24 August, Celsius (CEL) traded down by 17.7% and KeyFi traded up by 2%.

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