Celsius Accuses Jason Stone and His Company KeeFi Inc. of “gross negligence” and “extraordinarily unqualified” crypto investment
Celsius Accuses Jason Stone and His Company KeeFi Inc. of “gross negligence” and “extraordinarily unqualified” crypto investment
Celsius Network LLC. sued a former investment manager on Tuesday, accusing him of losing or stealing tens of millions of dollars in assets before the crypto lender went bankrupt last month.
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In a complaint filed in Manhattan bankruptcy court, Celsius accused Jason Stone and his company KeeFi Inc. of “gross negligence” and “extraordinarily unqualified” crypto investing when Stone portrayed himself as a leader in the field.
Celsius said that Stone proved “incompetent” to deploy the coins profitably, causing losses of “several tens of millions of dollars”.
It said it misappropriated the assets to buy hundreds of non-fungible tokens (“NFTs”), which they kept out of reach, and covered its tracks by using Tornado Cash, a crypto “mixer” approved by the US Treasury Department On August 8th because it can help reduce the proceeds of cybercrime.
Tuesday’s lawsuit was filed six weeks after Keefe sued Celsius in a New York state court in Manhattan.
It claimed that Celsius operated a Ponzi scheme, mismanaged customer deposits, failed to hedge investments, and potentially defrauded Stone out of hundreds of millions of dollars in compensation.
Stone worked with Celsius for nearly seven months ending in March 2021, court papers show.
In an emailed statement, Stone’s attorney Kyle Roche said that Kify’s compensation, including NFTs, was authorized by Celsius Chief Executive Alex Mashinsky.
“Celsius’ most recent filing is an attempt to rewrite history and make Keefi and Mr. Stone scapegoats for their organizational incompetence,” Roche said.
Both lawsuits seek to recover amounts that each party believes the other owes, as well as compensatory and punitive damages.
Celsius, based in Hoboken, New Jersey, filed for Chapter 11 protection from creditors on July 13, a month after it halted withdrawals and transfers for its 1.7 million customers due to “extreme” market conditions.