Celsius accused of ex-employees of market manipulation

Celsius accused of ex-employees of market manipulation

The competitive crypto loan Celsius accuses the allegations of a former employee for alleged manipulation of the crypto markets and a lack of implementation of basic account controls last year.

Jason Stone, CEO of the staking software and strategy company Keyfi, A lawsuit submitted on Wednesday before the Supreme Court of New York, the Celsius market manipulation.

Stone also accuses Celsius of refusing to comply with his contractual obligations to "pay the millions of dollars who are due to him in accordance with a profit sharing agreement," the file says.

It is the latest development for the battered lender who stopped account withdrawals last month, citing "extreme market conditions". Celsius has opposed the calls of his lawyers to register bankruptcy in accordance with Chapter 11, and instead implemented a "Hodl" mode function, with which users can demonstrate their support by not being able to withdraw their money for a longer period of time.

KEYFI, whose assets and teams were taken over by Celsius in mid -2020, set out to manage customer deposits of hundreds of million dollars, said Stone in a Statement on Twitter under his anonymous handle 0x_b1.

The risk management team from Celsius monitored the investment strategies and the performance of Keyfi via the portfolio management platform Hedguard and the Defi-Dashboard Debank.

"She [Celsius] assured me that their trading teams appropriately secure any potential temporary loss from our activities in liquidity pools as part of this surveillance," said Stone in his explanation. "They also assured me that they have risk management and protection to take into account fluctuations in token prices."

A temporary loss occurs when the blocked assets of a liquidity provider in a liquidity pool change in a liquidity pool compared to the time they were stored in the cash value.

The executives of Celsius insured Stone repeated that the lender has completed the necessary security transactions to ensure that price fluctuations in certain cryptos would not significantly and negatively influence the company or its ability to repay inserts, according to the file.

Although Celsius laid the accusations stated in the lawsuit and Stone's statement. Stone and his team relied on the actual representations of Celsius.

"Celsius has failed to implement basic risk management strategies to protect themselves against the risks of price fluctuations that are inherent in many of the investment strategies used," says the submission.

When the alleged evidence of mismanagement and fraud increased, Stone came to the conclusion that he could no longer work with Celsius, and announced his business relationship with the lender.

When Celsius and Keyfi separated in March last year, the company managed assets worth almost $ 2 billion on behalf of the lender, said Stone.

"The unfortunate events that have been publicly competed in the past few weeks show that the plaintiff was right-Celsius has roughly managed his customer money wrongly, failed to carry out basic internal audits to meet his obligations, and manipulate crypto-assets for his own advantage and for the advantage of his clients." The file is.

Stone, which calls for a jury, calls for a commitment to compensation in an amount to be determined at the negotiation and the confiscation of money owed as well as interest before and after the judgment. Celsius has 20 days to respond to the complaint. The failure to appear in court or to give an answer to the complaint leads to a default judgment against the lender, according to the file.

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The contribution Celsius of ex-employees of market manipulation is not financial advice.