Celsius Accused of Fraud in Lawsuit by Ex-Employee

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."

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.