Celsius Network served its former Investment manager, Jason Stone and KeyFi Inc., with a suit claiming he took advantage of his position to steal assets worth millions of dollars for personal profit.
The suit, filed in the United States Bankruptcy Court in the southern district of New York, is seeking disgorgement of millions of dollars in assets and return of company property that the ex-money manager allegedly took off with after leaving the company.
“The defendants stole millions of dollars in coins from Celsius “wallets” – blockchain addresses where coins and other digital assets can be stored – by transferring them to wallets that, upon information and belief, are controlled by the Defendants,” the bankrupt lender alleged in the suit.
Celsius accuses ex-manager of broad day theft
Celsius also claims that Stone used its cryptocurrencies to purchase non-fungible tokens and then stole those NFTs by transferring them to wallets that, upon information and belief, it owns or controls, and then refused to account for these decisions while running the office.
“The Defendants also sold some of the purloined assets for seven-figure returns (which they pocketed). Stone and/or KeyFi also appear to have used Celsius coins to acquire for themselves interests in numerous blockchain-related companies and platforms that they continue wrongfully to hold,” Celsius said in the lawsuit.
Stone allegedly used troubled Tornado Cash to cover moves
The suit further claims that, in September 2021, Stone accessed Celsius’ 0xb1 wallet, stole cryptocurrencies worth $1.4 million, and then funneled them through the Tornado Cash service that is currently facing sanctions by the United States Treasury Department’s Office of Foreign Asset Control.
“Stone and KeyFi laundered millions of dollars of Celsius property (or its proceeds) through Tornado Cash on dozens of occasions, and continue to hold property (and its proceeds) of great value that rightfully belong to Celsius. 5,” the complaint reads in part.
Celsius explains liquidation row with ex CEO
Celsius, which filed for bankruptcy after freezing withdrawals in June, wants the return of the assets allegedly stolen from the company to go towards its liquidation. The firm also stated that Stone lacks the skills and experience to successfully lead investment strategies.
Celsius is facing a counterclaim by Stone, who alleges that the company was involved in a Ponzi scheme whereby it inflated the prices of cryptocurrencies and marketed itself as a transparent and well-capitalized business, as well as participating in the fall of the TerraUSD stablecoin.
By press time, Stone or a representative from KeyFi Inc. were unavailable to respond to questions from Be[In]Crypto.