Former Celsius partner accused the company of fraud

Former Celsius partner accused the company of fraud

It looks like Celsius’ string of problems isn’t ending. Now they will have to deal with former counterparties.

A New York company, KeuFi, has filed a lawsuit against Celsius. They accuse the service of market manipulation and lack of basic controls to protect customer accounts.

You can read the gist of the claim in a series of tweets from KeyFi CEO Jason Stone.

KeyFi Inc was a counterparty to Celsius – helping them develop and implement DeFi technology for lending. KeyFi made hundreds of millions of dollars in profits during an eight-month collaboration.

In April 2021, the development project ended. But Celsius offered to take KeyFi’s customer deposits. We are talking about $2 billion worth of assets.

Celsius’ risk management team was responsible for the investment strategies, as well as the HedgeGuard and DeBank platforms. At the same time, the credit platform assured that they competently managed risk and hedged any potential losses in the liquidity pools.

KeyFi accused Celsius of unprofessionalism and deliberate creation of a crypto pyramid scheme.

According to Stone, Celsius’ high interest rates are a Ponzi scheme that the lender used to circumvent the liquidity crisis and “lure new investors.”

For now, Celsius is restructuring. Yesterday, it paid off its Maker DAO loan and got back its pledge of 21,962 WBTC ($440 million).

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