Jason Stone of KeyFi filed a lawsuit against Celsius, claiming that Celsius owed KeyFi “millions of dollars,” and now Celsius returned fire by suing KeyFi and Jason Stone for the mismanagement and theft of client funds.
The complaint describes KeyFi and Stone as
“extraordinarily inept at the investment strategies they were undertaking.”
The legal complaint claims that Stone was given access to the private keys of a Celsius-owned wallet, referred to as “0xb1.” Said wallet existed to allow Stone to manage Celsius’ DeFi strategy, according to terms agreed between both parties.
However, Celsius alleges that Stone misused the funds to purchase CryptoPunk, Bullrun Babes, and hundreds of other NFTs in February 2021 for a total of 1,070 ETH. Stone later sold four of the CryptoPunks for 1,071 ETH before transferring the ETH to Tornado Cash. Many of the NFTs purchased by Stone were also allegedly moved from Celsius-owned wallets to a wallet fully controlled by Stone.
Celsius claims that Stone had no authorization to purchase NFTs with Celsius funds. The complaint also states that Stone may have done so as he was “aware that transfers of NFTs in and out of the Wallets would not be visible to Celsius through the operative dashboards.”
The lawsuit indicates that Stone used a mixture of NFT purchases and Tornado Cash to siphon funds from Celsius wallets without raising internal alarms.
After Celsius broke ties with Stone, it withdrew funds from the 0xb1 wallet as Stone still had access to the private keys. However, the wallet received a $1.4 million DAI airdrop in September 2021, allegedly stolen by Stone and laundered through Tornado Cash along with an additional 320 ETH.
Alongside the allegations of theft, Celsius claims that Stone lost over $50 million in Celsius funds in a poorly executed DeFi trade “after a sharp fall in the price of ETH.” The position was allegedly liquidated on February 23, 2021, a day when Ethereum dropped from 24% to $1,355 before…
Click Here to Read the Full Original Article at Ethereum (ETH) News | CryptoSlate…
