Cody McGrath 
The CEO of KeyFi has been targeted by cryptocurrency lender Celsius. KeyFi had sued Celsius a week prior to its bankruptcy.
On Tuesday, insolvent cryptocurrency lender Celsius countersued DeFi protocol KeyFi and its CEO Jason Stone in the US Bankruptcy Court. They claimed Stone had falsely represented himself as an authority on the subject and that Stone and his company had misappropriated Celsius coins. A few weeks prior, KeyFi had filed a lawsuit against Celsius alleging that the latter had broken a profit-sharing agreement.
KeyFi offered Celsius DeFi strategy and staking services. The defendants are accused in the Celsius lawsuit of stealing millions of dollars worth of coins from Celsius wallets. The defendants allegedly purchased NFTs with Celsius currencies without the company’s consent. They transferred them to their personal wallets, and later sold some of them for “seven-figure returns (which they pocketed).” Additionally, the defendants are accused of using Celsius coins to invest in other cryptocurrency businesses while concealing their activities by using Tornado Cash, a crypto privacy protocol that was recently outlawed by the US Treasury Department.
KeyFi operated inside a special-purpose vehicle that belonged to Celsius. The plaintiffs asserted that due to the defendant’s egregious conduct and presumably as a result of the converted assets, they had lost “several tens of millions of dollars.” They also asserted that the DeFi protocol made baseless accusations against Celsius and neglected to repay payments when asked to do so. They tweeted about this:
“As Stone clearly intended, the complaint and Twitter thread generated sensational media reports amplifying his false narrative.”
On July 7, KeyFi filed a lawsuit against Celsius, stating that Celsius had broken a “handshake agreement” to split earnings. They stated that Celsius ran a Ponzi scheme and the agreement was worth millions of dollars. When KeyFi sued Celsius, it was purportedly bankrupt and had already stopped accepting withdrawals as of June 13. A week later, Celsius filed for bankruptcy.