Cryptocurrency company Celsius has accused its former money manager of poor investment choices and theft, stealing tens of millions of dollars in assets.
The crypto lender filed for bankruptcy in July after it froze customer assets. The company has now alleged in a lawsuit that former asset manager Jason Stone, CEO of KeFi Inc, lied about its investing abilities and badly managed the company assets.
In 2020, unhappy with KeyFi’s reporting practices after failing to hedge against price swings among other bad performances, Celsius demanded the return of coins under Stone’s authority only months after he began managing money for the company.
However, the company was unable to recover all the assets, according to the lawsuit.
As well as a bad attempt to manage assets, Celsius claims KeyFi converted company assets to non-fungible tokens (NFTs) and stole them, allegedly covering its tracks with a ‘crypto mixer’ recently banned by the US Treasury Department.
Attorneys working for the bankrupt crypto lender said the defendants liability to Celsius is “staggering”.
The complaint against Stone was made only a month after he tried to sue Celsius accusing the company of fraud and hundreds of millions of dollars in paychecks.
“We discovered Celsius had lied to us. They had not been hedging our activities, nor had they been hedging the fluctuations in crypto-asset prices. The entire company’s portfolio had naked exposure to the market”, Stone said in a Twitter post.
Stone’s attorney Kyle Roche said: “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.
“Celsius’s most recent filing is an attempt to rewrite history and use KeyFi and Mr Stone as a scapegoat for their organizational incompetence.”