Celsius on Thursday was sued by former investment manager Jason Stone, as pressure continues to mount on the firm amid a crash in cryptocurrency prices. Stone has alleged, among other things, that Celsius CEO Alex Mashinsky (above) was “able to enrich himself considerably.”
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Crypto lender Celsius artificially inflated the price of its own digital coin, failed to hedge risk and engaged in activities that amounted to fraud, a lawsuit alleges.
Celsius on Thursday was sued by former investment manager Jason Stone, as pressure continues to mount on the firm amid a crash in cryptocurrency prices.
The lawsuit in New York state court comes after Celsius, which offers customers interest for depositing their crypto, was forced to pause withdrawals for its users as it faces a liquidity crisis.
Celsius was not immediately available for comment on the lawsuit when contacted by CNBC.
Stone’s relationship with Celsius
Celsius acts like a bank in that it offers customers yield, sometimes as high as nearly 19%, if they deposit their crypto with the company. The firm then lends that crypto out to others willing to pay a high interest rate to borrow. Then it tries to pocket that money in order to give the yield back to customers.
Stone founded a company called KeyFi which specialized in crypto trading strategies. Celsius and KeyFi cut a “handshake deal” whereby the latter firm would “manage billions of dollars in customer crypto-deposits…
