Ex-Celcius defi manager, Jason Stone accuses Celsius Network of being a ‘Ponzi scheme’. Jason Stone who is the CEO of Keyfihave right now, revealed that he filed a lawsuit suing Celsius Network for allegedly ‘refusing to honor its contract.
Within the lawsuit, Jason Stone accused Celsius Network of a number of things such as manipulating the crypto asset markets, failing to put in place basic accounting controls to protect customer deposits, and failure to carry through on promises made in contract.
Jason Stone’s Dispute With Celsius
In a long Twitter thread made on the @0x_b1 Twitter Account, Stone wrote that the DeFi account 0xb1 was created by Celsius to manage nearly $2 Billion of Celsius’ assets. Celsius Network also reportedly assured Stone that they had risk management and hedging in place to account for fluctuations in token prices.
CEO of Celsius photo by Piaras Ó Mídheach Getty Images
However, Stone wrote: “In Feb 2021, we discovered Celsius had lied to us. They had not been hedging our activities, nor had they been hedging the fluctuations in cryptoasset prices. The entire company’s portfolio had naked exposure to the market.”
Full thread from Jason Stone using @0x_b1 twitter account
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
Stone also explains in his thread that after he and KeyFi had terminated their relationship, Celsius Network reportedly refused to acknowledge their failures and tried to put the blame on Stone instead, which is why he is bringing Celsius to court for legal action.
Accusations Of Being A Ponzi Scheme
Within the lawsuit that was filed, Stone had literally referred to Celsius Network as a ‘Ponzi Scheme’ at one point, explaining that Celsius both failed to hedge its investments and did not manage to maintain their ETH holdings equal to liabilities, because of this, “As customers sought to withdraw their ether deposits, Celsius was forced to buy ether in the open market at historically high prices, suffering heavy losses.”
Stone’s lawsuit against Celsius came weeks after they had stopped all crypto withdrawals on June 13th. You can read the full lawsuit here.