Celsius reaches an agreement with KeyFi, ending 3 years of legal dispute
The conflict between Celsius and KeyFi has come to an end when the two sides reached a settlement agreement. Accordingly, KeyFi will transfer tokens and NFTs to Celsius for liquidation within the next 12 months. In return, KeyFi and Jason Stone will receive up to $800,000.
According to TheBlock, after many legal disputes related to the relationship between KeyFi and founder Jason Stone with cryptocurrency lending company Celsius, the two sides agreed to settle according to the agreement filed with the court on last week.
Celsius to liquidate tokens settlement, hundreds of NFTs following with KeyFi founder Jason Stone https://t.co/sgrj76nfoj— The Block (@TheBlock__) July 14, 2024
Specifically, KeyFi will transfer a series of assets to Celsius, including hundreds of different tokens and valuable NFTs. Additionally, Celsius will receive an additional $1.1 million from KeyFi from the sale of a Mutant Ape Yacht Club NFT to billionaire Adam Weitsman, which is currently held in an escrow account. KeyFi will also transfer assets related to DeFi protocols such as Spartan, Unslashed, Stakehound and crypto company Fireblocks.
As part of the deal, Celsius will liquidate these assets within the next year. Celsius will then pay an initial payment of $300,000 to KeyFi and Jason Stone, along with a rare NFT of Marco Santorini.
Upon completion of the liquidation process, Celsius will pay an additional 10% of the proceeds to KeyFi, up to a maximum of $500,000. This means that every time Celsius sells a token or NFT, KeyFi will receive a 10% corresponding share of the revenue.
Besides, Celsius will also liquidate wallets related to the dispute between Celsius and KeyFi. These disputed wallets are assets belonging to Celsius but are being managed by KeyFi during the partnership.
These wallets include a variety of tokens, especially high-value NFTs including:
· 13 CryptoPunks NFTs.
· 3 NFT Fidenzas by artist Tyler Hobbs.
· 19 NFT Meebits created by the CryptoPunks development team.
· 4 Mutant Apes NFTs.
· 14 Otherdeeds NFTs.
Jason Stone and the KeyFi team used to manage 0xb1, an investment management unit that was acquired by Celsius from August 2020 to March 2021. The conflict between Celsius and KeyFi began when KeyFi founder Jason Stone accused Celsius of not fulfilling its commitments and arbitrarily operating under a Ponzi model. Stone contends that Celsius lied about its risk management processes and failed to honor its original agreements.
Realizing that, Stone offered to end the relationship, file a lawsuit against Celsius and return the money. However, during the transaction process, that amount of money suffered a significant impermanent loss due to market fluctuations, but Celsius accused KeyFi of embezzling the money and refusing to pay them remuneration as agreed in the cooperation contract.
Celsius countersued KeyFi, alleging that Jason Stone and his company committed serious mismanagement, resulting in the loss of millions of dollars from Celsius's wallets. The company also alleges that Stone and KeyFi used cryptocurrency mixing services like Tornado Cash to hide transactions, and transferred millions of dollars in Celsius assets to private wallets. Conflicts from both sides led to a legal dispute that lasted for 3 years.
Celsius is a cryptocurrency lending company that filed for bankruptcy protection in July 2022, with a deficit of up to $1.2 billion. In February 2024, Celsius announced its exit from bankruptcy and pledged to pay off $3 billion in debt to users and has now refunded $2 billion to more than 171,000 customers from the sale of ETH staking in early 2024.
Celsius is also a company involved in a lot of litigation. In addition to the dispute with KeyFi, CEO Alex Mashinsky was arrested last year and is awaiting trial. Most recently, Celsius sued 1,500 customers, demanding the collection of $100 million in assets withdrawn before bankruptcy.
