Celsius Accused of Fraud in Lawsuit by Ex-Employee

The roughed-up crypto lender froze withdrawals last month and later said it was exploring restructuring options.

AccessTimeIconJul 7, 2022 at 10:43 p.m. UTC
Updated Jul 8, 2022 at 4:23 p.m. UTC

Stephen Alpher is CoinDesk's co-regional news chief, Americas. He holds BTC and ETH above CoinDesk’s disclosure threshold of $1,000.

A lawsuit filed in the New York State Supreme Court by KeyFi accuses Celsius of crypto market manipulation and failure to put in place basic accounting controls to protect customer deposits.

Jason Stone – the founder and CEO of KeyFi, which was partly acquired by Celsius – took to Twitter with the court filing to describe the falling out between the parties.

Stone wrote: "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."

The lawsuit accuses Celsius – prior to Stone coming on board – of having no organized investment strategy other than "desperately seeking a potential investment that could earn them more than they owed to their depositors."



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Stephen Alpher is CoinDesk's co-regional news chief, Americas. He holds BTC and ETH above CoinDesk’s disclosure threshold of $1,000.

CoinDesk - Unknown

Stephen Alpher is CoinDesk's co-regional news chief, Americas. He holds BTC and ETH above CoinDesk’s disclosure threshold of $1,000.

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