Celsius and KeyFi CEO End Three-Year Fraud Dispute
07/06/2024 01:50
Celsius and KeyFi CEO Jason Stone settle a three-year legal battle over fraud allegations and broken agreements.
The now-defunct crypto lending platform Celsius has settled its three-year-long case with KeyFi CEO Jason Stone. The litigation council submitted a letter to the judge detailing the agreement.
KeyFi and Celsius have a proper working relationship. The former served as Celsius’s investment manager between 2020 and 2021.
Fraud Case Settled: Celsius and KeyFi CEO Agree
The litigating council sent an official letter to US bankruptcy judge Martin Glenn, details of which were redacted, indicating that Celsius (the accused) and Mr. Stone (the plaintiff) had reached a settlement agreement.
KeyFi served as Celsius’s investment manager from August 2020 to March 2021, based on a Memorandum of Understanding (MOU). It worked under the Celsius umbrella as Celsius KeyFi and, therefore, expected part of the profits it made under Celsius over several staking and DeFi strategies.
Reportedly, the two parties had a “handshake agreement,” which Celsius allegedly refused to honor, leading KeyFi to miss out on “millions of dollars.” In a long section of the complaint, Stone claimed Celsius was running a Ponzi-style operation by luring depositors with high interest rates.
Read more: How To Identify a Scam Crypto Project
According to the plaintiff, this strategy was the lender’s approach to “repay earlier depositors and creditors.” The complaint, therefore, detailed:
- Negligently misrepresenting its risk management protocols.
- Fraudulently inducing KeyFi to work with Celsius by presenting misleading information about its business operations.
Neither Celsius nor KeyFi or Stone immediately responded to BeInCrypto’s request for comment.
While partnerships in the crypto space often rely on trust, verifying all aspects of the agreement and operations can prevent misunderstandings. This case underscores the need to balance trust with verification.
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Lockridge Okoth is a journalist at BeInCrypto, focusing on prominent industry companies such as Coinbase, Binance, and Tether. He covers a wide range of topics, including regulatory developments in decentralized finance (DeFi), decentralized physical infrastructure networks (DePIN), real-world assets (RWA), GameFi, and cryptocurrencies. Previously, Lockridge conducted market analysis and technical assessments of digital assets, including Bitcoin and altcoins such as Arbitrum, Polkadot, and...
Lockridge Okoth is a journalist at BeInCrypto, focusing on prominent industry companies such as Coinbase, Binance, and Tether. He covers a wide range of topics, including regulatory developments in decentralized finance (DeFi), decentralized physical infrastructure networks (DePIN), real-world assets (RWA), GameFi, and cryptocurrencies. Previously, Lockridge conducted market analysis and technical assessments of digital assets, including Bitcoin and altcoins such as Arbitrum, Polkadot, and...
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