Crypto lending platform Celsius entrusted corporate funds worth around $530 million to asset manager Jason Stone who engaged in high-risk leveraged crypto trading strategies that resulted in a massive loss.
According to a July 7 report from blockchain analytics firm Arkham Intelligence, these trading strategies resulted in losses of $350 million when Stone "returned capital compared to the value of the crypto assets Celsius originally sent at the time of return."
Stone was Head of DeFi Staking at Celsius (his firm — KeyFi — was acquired by Celsius in 2020). Stone also led the team behind yield farming account 0xb1, which managed nearly $2 billion in assets for Celsius at one point.
He is now suing Celsius for allegedly operating a Ponzi scheme and seeking damages for an amount to be determined at trial.
The lawsuit, filed in New York on Thursday, July 7, alleges that Celsius used customer funds to “manipulate crypto-asset markets, had failed to institute basic accounting controls which endangered those same deposits, and had failed to carry through on promises.”
On June 12, Celsius announced its decision to freeze withdrawals and transfers from its platform. And earlier this week, the company announced massive layoffs.
Photo via FellowNeko on Shutterstock
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