A former partner of the network and provider of staking software, KeyFi, filed a lawsuit against Celsius earlier this summer, accusing it of defrauding customers, mishandling their money, and breaching a contract. The court has not yet decided on this matter. However, in an amusing turn of events, KeyFi has been accused of utilizing Celsius money for unlawful business operations, outright theft, and "extreme negligence" by the failed cryptocurrency lender, who has replied with a lawsuit of its own.
<h2>Alleged Gross Mismanagement</h2>
The return <a href="https://www.docdroid.net/kvayMU5/cel-v-keyfi-pdf" target="_blank" rel="nofollow noopener">complaint</a> further asserts that in 2020, Jason Stone, the CEO of KeyFi, reportedly falsely described himself as a pioneer in coin staking and DeFi to acquire access to Celsius money. This allegedly marked the beginning of the two former parties' business connection. However, the crypto lender claims that things rapidly turned worse.
<h2>Allegations Of Outright Theft</h2>
KeyFi allegedly stole millions of dollars worth of business assets and processed them through <a href="https://www.cryptoknowmics.com/news/trm-labs-tornado-cash-case-a-new-threat-for-sanctions-compliance/" target="_blank" rel="noopener">Tornado Cash</a> to conceal future interactions with that money.

KeyFi allegedly declined to disclose its business operations when questioned about how Celsius money was being utilized, exposing the company to unanticipated liabilities. The paper also shows that KeyFi appeared to have made an amicable commitment to Celsius, including the return of all funds and Celsius's portion of the earnings. However, this promise didn't happen.
<h2>Illegal NFT Purchases</h2>
One of the main issues in the case brought by Celsius and Celsius KeyFi LLC, a subsidiary formed as a result of the cooperation between the two former partners, is the use of money from Celsius that was supposed to be invested in DeFi and staking initiatives. It was intended to use these funds to buy hundreds of NFTs from various collections, including <a href="https://www.cryptoknowmics.com/news/yuga-labs-releases-ip-licensing-agreement-for-cryptopunks-and-meebits/" target="_blank" rel="noopener">CryptoPunks</a> and Bullrun Babes.

According to the document, KeyFi leadership approved the transactions despite a contract between the parties prohibiting using Celsius assets to buy NFTs. Additionally, some of these NFTs were allegedly sold later, generating Celsius "seven-figure returns."

Celsius Files a Counterclaim Against KeyFi, Accuses Ex-Staff of Fraud

KeyFi has been accused of utilizing Celsius money for unlawful business operations, outright theft, and "extreme negligence."

Gungun is an enthusiastic writer that likes to create content for various aspects of the blockchain and crypto industry. She carries out extensive research and provides readers with informative and high-quality material.

Celsius Files a Counterclaim Against KeyFi, Accuses Ex-Staff of Fraud

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