A former investment manager at Celsius Network filed a lawsuit against the popular crypto lending firm on Thursday, claiming that the firm involved itself in market manipulation and failed to create basic accounting controls to safeguard customer deposits.
Jason Stone, the CEO and founder of KeyFi, who was employed by Celsius, filed the matter to the court and used Twitter social media to disclose the fallout between the parties.
Stone revealed that Celsius used clients' deposits to manipulate (rig) the price of its crypto token to earn extra cash. Stone further said Celsius failed to properly hedge risk, an incident that caused Celsius to lose massive funds when the extreme market rout came in. Celsius was forced to freeze customer assets.
Stone stated:
"We discovered Celsius had lied to us. They had not been hedging our activities, nor had they been hedging the fluctuations in crypto asset prices. The entire company’s portfolio had naked exposure to the market."
Stone said Celsius...
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