Celsius has filed a countersuit on its former employee Jason Stone for stealing valuable assets from the company while demanding damages and restitution.
Last month in July 2022, troubled crypto lender Celsius Network filed for Chapter 11 bankruptcy. Following that there have been new troubles brewing up for the crypto lender. Jason Stone, a former employee at Celsius and now the CEO of KeyFi had filed a lawsuit against Celsius Network accusing the crypto lender of market manipulation. In the filing submitted to the New York State Supreme Court, Jason Stone wrote:
“We discovered Celsius had lied to us. They had not been hedging our activities, nor had they been hedging the fluctuations in crypto asset prices. The entire company’s portfolio had naked exposure to the market.”
Celsius Responds with Countersuit against Former Employee
A month later, Celsius Network ultimately responded by filing a countersuit against KeyFi and its CEO. The troubled crypto lender has accused the defendants of stealing valuable property from Celsius while demanding damages and restitution. In the court filings submitted by Celsius, the crypto lender notes:
“This action arises from the defendants’ incompetence, deceit and conversion. The lender labels KeyFi and Stone as “not just incompetent, they were also thieves”.
Celsius has further accused Jason Stone and his company KeyFi of using the recently banned crypto mixer Tornado Cash in order to cover any proof left by their theft of Celsius’s assets. “The defendants’ liability to Celsius is staggering,” said Celsius.
The troubled crypto lenders further added that the funds lost by KeyFi through negligence are worth millions of dollars. Besides, the funds stolen are worth tens of millions of dollars said Celsius.
Celsius and Its Legal Battle
Ever since Celsius announced its bankruptcy, the crypto lender has been facing mounting legal challenges. The United States Trustee recently filed a motion questioning the operation of Celsius Networks and its financial health.
The Trustee has accused Celsius of not being transparent as the embattled crypto firm has failed to submit sufficient information including specifics about cost concerning the mining expansion which is still in operation.
Also, there have been concerns that Celsius’s actual debt exceeds three times that of its reported $1.2 billion. Sources from the crypto industry believe that Celsius hasn’t reported its true numbers yet. In some positive development for the company, a court ruling has allowed Celsius to sell its mined Bitcoins in order to cover its debt.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
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