“Unfortunately, Defendants Stone and KeyFi, Stone’s majority-owned commercial vehicle, were found to be unable to wager coins profitably and appear to have lost thousands of Celsius coins due to their gross mismanagement. But the defendants were not just incompetent , they were also thieves,” the lender argued.
“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, based on information and conviction, are controlled by the defendants. “
The company also alleges that Stone and his company used their coins to buy “hundreds of “non-fungible tokens (NFTs)” and then stole the NFTs they obtained with Celsius’ coins by sending them to wallets that, after information and persuasion, possess or control them.”
Celsius’s complaint comes after an initial complaint from Stone. In the lawsuit filed in early July, Stone Celsius cited a Ponzi scheme. He claimed that Celsius used customer money to manipulate the price of its original token Cel. Stone also claimed that Celsius lost a lot of money because it failed to hedge against the risks of its practices.
Founded in 2017, Celsius has accumulated more than $20 billion in assets in five years thanks to its promises: The company promised 18% interest rates to customers depositing their cryptocurrencies. This is a much higher payout percentage than traditional savings accounts.
To critics who felt that this model was not sustainable over time, CEO and founder Alex Mashinsky emphasized that it was possible. But according to Stone’s complaint, the fluctuations in coin prices have completely disrupted Celsius and weakened its ability to meet its obligations to its depositors.
Celsius only took deposits in bitcoin and ether, the top two cryptocurrencies by market value. This means, according to Stone, that when the prices of these two coins rose faster than other tokens, the company owed more to its customers. This happened because Celsius included other coins in its customer compensation model.
“Before the plaintiff came on board, defendants had no unified, organized, or overarching investment strategy other than lending the consumer deposits they received. Instead, they were desperate for a potential investment that could bring them back more than they owed.” to their depositors,” Stone wrote in his complaint, which you can read here.
“Otherwise, they would have to use additional deposits to pay the interest owed on previous deposits, a classic ‘Ponzi scheme’.”
Stone also claimed that Celsius owed him hundreds of millions of dollars in compensation. He explained that his company Celsius had raised $800 million by investing in decentralized financing projects (DeFi). The agreement with the cryptocurrency lender provided for him to receive 20% of the $800 million, which, according to Stone, has not happened.