DeFi portfolio manager KeyFi accuses Celsius of being a fraud and a Ponzi scheme. Ex investment manager at Celsius, Jason Stone, sued the lending protocol, inflated the price of its native coin CEL, and failed to hedge risk. Currently, Stone is CEO and co-founder at KeyFi.
Related: Celsius Network Paid Off Its Loan to MakerDAO
According to the legal action, Celsius manipulated the crypto market using funds of customers and failed to organize basic management steps to organize the deposits and failed to keep promises.
Stone posted on Twitter that from August 2020 to April 2021, he headed the group and managed the 0xb1 address. The account was managing about $2 bln in assets for Celsius, which assured having proper risk management measures.
In August 2020, 0xb1 was created, along with other addresses, to send @CelsiusNetwork’s customer deposits to us to manage.
— 0xb1 (@0x_b1) July 7, 2022
Stone's tweet says that last February they found out that Celsius had lied and hadn't hedged the activities and volatilities in crypto prices. Stone wrote that Celsius reportedly owes KeFi an essential amount of money, and he has been making attempts to resolve the problem for a year. However, Celsius denied that the accusations are true.
The lawsuit also alleges that Celsius is operating a Ponzi scheme as a recent situation showed that the company doesn’t hold enough holdings to implement withdrawals.