KeyFi, a former Celsius partner, is suing him over an alleged multi-million dollar debt. A report sheds light on the lender’s high-risk operations and losses.
- KeyFi accuses Celsius of fraud and calls it a Ponzi scheme.
- La firma habría administrado los fondos de clientes de Celsius.
- The lender allegedly pursued a reckless strategy.
- The challenges for Celsius remain.
The Saga of the Crypto-Lender Celsius continúa. A pesar de que esta semana logró terminar de pagar una deuda millonaria, los problemas de la asediada plataforma de préstamos no parecen haber terminado todavía.
This Friday, several reports revealed that the company is now facing a lawsuit from a former contractor that the accuses of mismanagement and fraud . The investment company KeyFi Inc . and its founder Jason Stone have filed legal action against Celsius in New York state court Thursday, alleging the lender owes it hundreds of millions of dollars in generated profits.
Celsius y KeyFi fueron socias entre 2020 y 2021, tiempo durante el cual Stone había trabajado con la prestamista. Crypto Briefing remember que Celsius began acquiring in mid-2020. During that time, Stone “ turned “your company to create DeFi a movement encouraging alternatives to traditional, centralized forms of financial services. strategies for Celsius The founder says, briefly managing clients’ funds on their behalf.
The news mediaThe Block a file containing information on transactions completed during a given time period. Blocks are the constituent parts of a blockchain. citó the legal submission, which details the arguments of KeyFi :
From August 2020 through March 2021, Plaintiff generated hundreds of millions of dollars in profits for the mutual benefit of the parties. Those profits came in the form of transaction fees, rewards for wagering tokens, and other appreciated assets. As in any investment relationship, Plaintiff and Stone were responsible for generating profits from the funds provided to them, while Celsius was responsible for ensuring that its investment strategies did not prevent it from paying its depositors in kind .
KeyFi y su fundador acusan a Celsius de fraude
Stone also took to Twitter to tell his side of the story. According to the founder and CEO of KeyFi your company was “ managing nearly $2 billion in assets”. de Celsius . The the lender’s risk management team was overseeing the investment strategies of KeyFi and assured him that it was hedging against market fluctuations and temporary losses from liquidity funds, Stone said.
Hi all! I’m Jason Stone, and from August 2020 until April 2021, I led the group of talented individuals who managed the 0xb1 address.
– 0xb1 (@0x_b1) July 7, 2022
However, this was not entirely true. KeyFi and its co-founder claim that Celsius was not adequately hedged against the risks, as he claimed, and that the company defrauded them during their business relationship. The plaintiff added that when he had attempted to unwind his DeFi positions, he was informed that Celsius had suffered a temporary loss.
“ We discovered that Celsius had lied to us. . They had not been hedging our activities, nor the fluctuations in cryptoasset a cryptoasset is any digital asset that uses cryptographic technologies to maintain its operation as a currency or decentralized application. prices. The company’s entire portfolio a collection of cryptocurrencies or crypto assets held by an investment company, hedge fund, financial institution or individual. had naked exposure to the market.” Stone wrote in a tweet .
According toThe Blockthe complaint goes on to state that Celsius suffered heavy losses during the cryptocurrency bull a person that is optimistic and confident that market prices will increase, this person is also known to be "bullish" about the market or price. run in 2021, failing to hedge its investments “ reckless and fraudulent “. He then adds that the lender began offering high interest rates to attract depositors when it faced a liquidity how easily a cryptocurrency can be bought and sold without impacting the overall market price. crisis, becoming a Ponzi scheme in the process.
Stone dijo que habría tratado de resolver la disputa con Celsius and get the money owed; but in the absence of response has chosen to take legal action. For the time being, Celsius has not commented on the allegations.
High-risk operations led to losses in the millions of dollars
The legal actions coincided with the release of a report by blockchain a distributed ledger system. A sequence of blocks, or units of digital information, stored consecutively in a public database. The basis for cryptocurrencies. analytics firm Arkham Intelligence which revealed that the company had lost millions of dollars of clients after taking advantage of them for high-risk operations.
The report, which was collected by Decrypt ensures that Celsius used USD $ 534 million to execute “ high-risk leveraged cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. trading strategies “through an external asset manager, which the investigation identified as KeyFi . According to the research, these strategies were translated into ” apparent losses of $390 million “.
The release appears to confirm several of Stone’s statements. Following a previous audit an audit is a process where developers inspect the underlying code and/or algorithm that compose systems and applications. of Chainalysis researchers at Arkham noted that an address a place where cryptocurrency can be sent to and from, in the form of a string of letters and numbers. for KeyFi managed more than 10% of all the assets of the Celsius under management by the end of 2020. Those funds, the report suggests, may have been part of the liabilities of Celsius with customers.
The report adds that KeyFi appears to have returned $1.13 billion in cryptocurrencies to the lender between February and May 2021, which corresponds to a gain of 111% (US dollar-denominated). However, it suggests that this percentage gain is relatively low when compared to the performance of several major assets over the same period.
Ultimately, the report sheds light on the suspicious operations of Celsius although it seems to suggest that KeyFi would be primarily responsible for the losses.
Withdrawals in Celsius remain frozen
The reports come amidst heavy scrutiny for Celsius since it froze withdrawals last month. As reported by DiarioBitcoin the digital digital technologies are these electronic tools that have the ability to generate, store or even process data. asset lending service suspended withdrawals on 12 June last, citing the “ extreme market an area or arena, online or offline, in which commercial dealings are conducted. conditions “and since then he has said little about it.
The firm has reportedly been exploring “ conduct strategic transactions ” y “ restructure its liabilities “as well as a possible restructuring of its board of directors. Meanwhile, other reports suggest that companies such as Goldman Sachs would be willing to buy the assets of the company for $2 billion.
Thursday of this week Celsius fully paid its debt to the protocol the set of rules that define interactions on a network, usually involving consensus, transaction validation, and network participation on a blockchain. MakerDAO unlocking a guarantee of around USD$456 million in Bitcoin the biggest and most popular cryptocurrency in the world. It is a decentralized digital currency that enables users to make trustless peer-to-peer transactions. wrapped (wBTC). Shortly thereafter, according to reported CoinDesk The company reportedly deposited a sum of $500 million of wBTC on the FTX exchange, which could suggest that it is looking to access more liquid assets.
- Celsius Network a network refers to all nodes in the operation of a blockchain at any given moment in time. contemplating bankruptcy and seeking legal advice, reports reveal
- Celsius Network pays another $120 million to mitigate debt to MakerDAO
- Vauld: another cryptocurrency lending platform a place to buy, sell and store cryptocurrency halts withdrawals amid price drop
Article by Hannah Estefania Perez / DiarioBitcoin
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