A Crypto lender which is now bankrupt has sued its ex-money manager over alleged theft. On Tuesday, Celsius Network sued Jason Stone accusing him of stealing or losing tens of millions of dollars in assets. The crypto lender went bankrupt in July.
Stone and his company KeyFi are being accused of extraordinarily inept “crypto investing” and gross negligence.
Stone Stole Millions of Dollars in Coins
In the complaint filed in Manhattan bankruptcy court, Celsius claimed that Stone falsely portrayed himself as a pioneer in the field and the former manager also proved “incapable” of deploying coins profitably, causing “many tens of millions of dollars” in losses.
Celsius said Stone misappropriated assets to buy hundreds of non-fungible tokens (NFTs) that he stored out of reach, and covered his tracks by using Tornado Cash, a crypto “mixer” that the US Treasury Department sanctioned on August 8 because it might help launder cybercrime proceeds, according to Reuters.
According to the court papers, Stone has worked with the company for nearly seven months and his tenure ended in March 2021.
Celsius Trying To Use Stone As A Scapegoat
Stone’s lawyer has claimed that the case against his client by Celsius is an attempt to use Stone as a scapegoat for their organizational incompetence. Kyle Roche also underlined that KeyFi’s compensation, including NFTs, had been approved by Alex Mashinsky, Celsius’s Chief Executive.
Stone Had No Authorization To Purchase NFTs
Although the Crypto-lender claimed that Stone had no authorization to purchase NFTs with Celsius funds. The lawsuit also alleged that Stone moved many NFTs from Celsius-owned wallets to a wallet fully controlled by Stone without any authorization from the company.
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, reported Cryptoslate.
However, Roche claimed that the transactions at the center of their complaint were not only publicly visible, but also advertised by Mr. Stone on Twitter. In fact, after Mr. Stone advertised these purchases, Celsius and Mr. Mashinsky sent KeyFi tens of millions more to deploy in DeFi.
“As alleged by KeyFi in the complaint it filed last month, the compensation that KeyFi received (including in the form of NFTs) was expressly authorized by Celsius’s CEO Alexander Mashinsky,” he tweeted.
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