Celsius Network has been hit with a lawsuit from one of his ex-employees. This comes moments after the company paid his entire Bitcoin loan† The person in question is Jason Stone, the founder and CEO of KeyFi Inc. The lawsuit, filed in New York, accuses Celsius Network of market manipulation.
According to a Tweet posted by Stone,
“… at the end of February 2021, we discovered that Celsius had lied to us. They had not hedged our business, nor had they hedged fluctuations in crypto asset prices. The company’s entire portfolio had bare exposure to the market.”
Stone says he was in charge of managing the 0xb1 wallet address. He says the 0xb1 address was created in 2020. It was created so that Celsius Network could send customer deposits that KeyFi could manage.
Stone and his firm severed ties with Celsius in March 2021. During the departure, Celsius is said to have suffered a lasting loss.
According to Stone,
“By the time Celsius and KeyFi broke up, we were managing nearly $2 billion in assets.”
According to the lawsuit, Celsius has a debt of $200 million due to incorrect accounting. Plus, it says Celsius had no idea how or why it happened.
In addition, Stone argues that the network owes KeyFi a significant amount of money.
Furthermore, there is no written agreement between KeyFi and Celsius in the lawsuit. This leads to speculation as to whether there is any basis for the allegations. Stone’s lawsuit against the company could be a way to make a quick buck. In addition, there is no official answer from Celsius. This makes the situation a little dumb.
What is Celsius doing?
Recently, it has come to light that Celsius has transferred nearly 25,000 packaged Bitcoin (wBTC) to FTX. The value of the tokens is approximately $528 million. The move has therefore alarmed many investors. Some fear that this will lead to significant dumping of BTC in the market. On the other hand, some also hope that the company will exchange the wBTC for BTC. This allows customers to withdraw their money.
Nevertheless, the company has kept quiet about the transfer. Furthermore, there is no official word from the CEO about the move.
The transfer of the packaged Bitcoin could also motivate the lawsuit. Much of the situation is pure speculation. There is little clarity about this. The lack of a formal written agreement further obscures the reality. However, we can expect additional information soon.
This crypto winter is certainly one of the coldest. Many crypto companies are in a challenging hole to climb out of. Either way, this crash has been a lesson to everyone.