Jason Stone is a Defi entrepreneur and the CEO of KeyFi Inc., one of the people behind the 0xb1 yield farming account is suing crypto lending company Celsius for allegedly failing to honor his contract. Stone is asking for unspecified damages and has decided to go ahead with a lawsuit
KeyFi claims that Celsius exploited client funds to “manipulate crypto-asset markets, failed to adopt fundamental accounting controls that put those very deposits at risk, and failed to meet commitments.”
Celsius ignored a “handshake agreement” according to the complaint filed on July 7. Celsius has to share a percentage of his profit with KeyFi for using the latter’s DeFi tactics. Additionally, the court charged Celsius with “negligent misrepresentation” regarding its risk management procedures. KeFi claimed that these statements were made for the sole purpose of associating with them.
In a significant part of the case, it is also alleged that Celsius operated a Ponzi scheme. The organization recruited new depositors with high-interest rates to “pay off old depositors and creditors.”
Celsius operated as a Ponzi scheme. pic.twitter.com/pGC8vrH3a0
— Dylan LeClair 🟠 (@DylanLeClair_) July 7, 2022
Stone also claimed in a lengthy conversation on Twitter that Celsius “ensured” the organization had risk management approaches in place, such as “covering any possible impermanent losses from our operations in liquidity pools” place.
After discussions with @CelsiusNetwork in mid 2020, Celsius began an acquisition of KeyFi’s assets and team. Thereafter, I pivoted KeyFi to staking and deploying DeFi strategies for Celsius.
— 0xb1 (@0x_b1) July 7, 2022
