Embattled Crypto Lender Celsius Accused of Fraud by Ex-Employee in Suit

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Embattled Crypto Lender Celsius Accused of Fraud by Ex-Employee in Suit | Bloomberg archive.ph/YDwBp

11 sats \ 5 comments \ @cryptocoin 8 Jul 2022 bitcoin

20 sats \ 0 replies \ @TheBTCManual 8 Jul 2022

The dirt is going to come out on all these companies, this employee is clearly an opportunist, he wasn't worried it was a ponzi when they were paying his salary, so don't come talk about it now, like you weren't fully knowledgable customer funds were used to bank roll your salary

0 sats \ 2 replies \ @cryptocoin OP 8 Jul 2022

Stone, who called Celsius a Ponzi scheme in the complaint, said it cheated him out of potentially hundreds of millions of dollars in pay.

More than a million people entrusted their savings to Celsius, according to the company. The appeal was obvious: The rates it paid were tens or hundreds of times higher than traditional savings accounts.

Behind the scenes, Celsius was investing customer funds in risky trading strategies, without proper controls, according to the lawsuit. Starting in August 2020, Celsius started transferring hundreds of millions of dollars to Stone’s company, KeyFi.

Though the two firms didn’t have a written agreement, Stone was given the private cryptographic keys to the funds, meaning he could have run off with them, according to the complaint.

Celsius also kept track of customers’ deposits in U.S. dollar terms, even if they were actually owed Bitcoin or other tokens, according to the suit. When this error was discovered, it resulted in “a $100-$200 million hole on its balance sheet,” Stone alleged.

0 sats \ 1 reply \ @cryptocoin OP 8 Jul 2022

There's another post, here on SN, with links to the Twitter thread by Stone, as well as a tl;dr: thread from Cory Klippsten:

Details on the Celcius ponzi #42486 https://twitter.com/coryklippsten/status/1545190394207817728 https://nitter.net/coryklippsten/status/1545190394207817728 <-- Shows the thread in a single, easy-to-read, web page

0 sats \ 0 replies \ @cryptocoin OP 8 Jul 2022

The complaint filed with the court:

KEYFI, INC., v. CELSIUS NETWORK LIMITED and CELSIUS KEYFI LLC https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=RvF30Mz2IZW63s1mjjau2Q==

0 sats \ 0 replies \ @cryptocoin OP 8 Jul 2022

The link for this post is using an archive for the article on Bloomberg's website. An archive has no paywall, no subscription requirement, and can be easier to read. The original article, on Bloomberg's website is:

Embattled Crypto Lender Celsius Accused of Fraud by Ex-Employee in Suit http://bloomberg.com/news/articles/2022-07-07/embattled-crypto-lender-celsius-accused-of-fraud-by-ex-employee