Along with the court petition, Jason Stone, the founder and CEO of KeyFi (which was partially bought by Celsius) turned to twitter to detail the parties’ dispute.
In his lawsuit, Stone referred to Celsius as a ponzi scheme and claimed that it defrauded him of prospective income in the hundreds of millions of dollars.
What is a Ponzi scheme?
A Ponzi scheme is an unlawful and fraudulent investment scheme that guarantees rapid, simple, large returns on investments with little to no risk. It is a specific kind of pyramid scheme in which the owner buys a small number of investors at the top of the pyramid who are initially given fantastic investment returns using money obtained from the second group of investors.
The second group is compensated with money received from a third group of investors; this process continues until the scheme’s prospective investor pool is depleted. Sometimes, when investors get returns, they decide to hold onto their investments rather than making any cash withdrawals. The operator is also delighted and only presents them their earnings balance to uphold the illusion that the plan is delivering on its promises of returns.
The Ponzi scam is named after Charles Ponzi. He was famous for using deceit to induce individuals to make investments with their money. The earliest known Ponzi scam was allegedly…
