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Celsius Sues Prime Trust and KeyFi for Allegations of Fraud

Cryptocurrency lending platform Celsius Network filed a lawsuit against its custodian Prime Trust in the United States Bankruptcy Court in the Southern District of New York, demanding the return of $17 million in cryptocurrency yesterday (23/23). 8).

In the petition, Celsius’s legal team alleges that Prime Trust failed to return $17 million in cryptocurrencies following the termination of the relationship in June 2021. According to Celsius, Prime Trust acts as a cryptocurrency custodian. Crypto to users based in New York and Washington from 2020 to mid-2021, returning $119 million in crypto after closing the business deal but retaining 398 Bitcoin (BTC), 3,740 Ether ( ETH), 2,261,448 USD Coin (USDC), and 196,268 degrees Celsius (CEL) – worth about 17 million dollars.

“At the beginning of the bankruptcy proceedings, Prime Trust is obliged to deliver all Celsius assets it already holds, including these remaining crypto assets, and request their immediate transfer of them. Hours under section 542 of the Bankruptcy Code,” the filing said. “In addition, Celsius looks for specific performance of certain contract terms that compel Prime Trust to offer and convert these crypto assets to Celsius.”

The legal team added:

“Celsius has been looking for a way for months to convince the Prime Trust to honor its obligations and transfer the identified assets to Celsius. Sometimes, it seems like those efforts are close to paying off. However, to this day, the Prime Trust continues to illegally hold them.”

In July, Celsius filed for Chapter 11 bankruptcy after closing debts to Compound (COMP), Aave (AAVE), and Maker (MKR). Tekmonk Blog reported on August 16 that the crypto lending platform was on the verge of running out of funds in October, a report showing that the company’s debt has grown to nearly $2.8 billion from a loss. $1.2 billion in bankruptcy filings.

Despite the bankruptcy proceedings, Celsius’s CEL price has risen more than 4,000% since June, hitting a three-month high of $3.86. However, it is down more than 50% to trade at $1.56 at the moment.

Celsius against KeyFi, false claims, and incompetence resulted in tens of millions of dollars in damages. At the same time, Celsius also went against decentralized finance (DeFi) protocol KeyFi and CEO Jason Stone in the US Bankruptcy Court, claiming Stone “exploded” that he was an expert in DeFi, and Stone and KeyFi damaged Celsius money through ignorance and fraud. The lawsuit comes weeks after KeyFi sued Celsius for not following through on a profit-sharing agreement.

KeyFi has provided Celsius with staking services and DeFi strategies.

According to Celsius’s lawsuit, the defendants stole millions of dollars in cryptocurrency from Celsius’ wallet. Furthermore, Celsius alleges that the defendants purchased (NFT) with Celsius coins without Celsius’ permission and then transferred them to their own wallets before selling some at a “seven-figure profit ( which they pocketed).” The defendants are also alleged to have purchased an interest in other crypto companies with Celsius funds and used Tornado Cash, a crypto-security protocol recently banned by the US Treasury Department, to conceal the funds. their activities.