It’s the two words that investors hate the most: “Ponzi scheme.”
And that’s the phrase that appears in a lawsuit filed in New York State Supreme Court on July 7 against Celsius Network, the cryptocurrency loan company that suspended fund withdrawals and other operations from its platform last month.
‘Our Life Savings is in Your Hands’
The suit was filed by Jason Stone, founder and CEO of KeyFi, which was partly acquired by Celsius, who said in the complaint that “the recent revelation that Celsius does not have assets on hand to meet its withdrawal obligations shows that the defendants were, in fact, operating a Ponzi scheme.”
Celsius Networks did not immediately respond to a request for comment.
The relationship between Stone and the company began to break down, the complaint said, when Stone discovered that “not only did the defendants lack basic security controls to protect the billions in customers’ funds they held, but they were actively using funds to manipulate crypto-asset markets to their benefit.”
Anger and fear about the Celsius situation roiled through social media.
“Our life savings is in your hands,” one person tweeted. “I ask you ALWAYS do whats best for depositors. We entrusted our hard earned money with you and your company. Do whats right!”
“guys if i dont get my money out my marriage is a goner,” another person said. “over 785,000 gone.”
‘Are You Winning Dad?’
And another tweet featured an image of stick figure hanging from a noose before a computer screen with…
