The troubled cryptocurrency lender Celsius has filed a lawsuit against former employee Jason Stone, founder of Keyfi and collector of non-fungible tokens (NFTs) known as "0xb1." Stone announced to the public on July 7, 2022 that he had filed a lawsuit against Celsius and disclosed that he had retained the crypto boutique law firm Roche Freedman LLP.

According to the court filing, Celsius lent Stone crypto assets that were to be used for staking, and Stone later asked to recover the funds. However, Celsius claims that not all of the funds were returned and that a "significant gap remained."

"As Celsius would later discover, Stone's repeated assurances that he could and would return all of Celsius' coins were lies intended to conceal the fact that he had either misplaced or stolen a substantial number of coins," Celsius argues. The company further alleges that Stone purchased NFTs with the tokens rather than staking them.

The cryptocurrency lender also accused Stone of concealing onchain transactions with the now-banned mixing application Tornado Cash. "On dozens of occasions, Stone and Keyfi laundered millions of dollars of Celsius property (or its proceeds) through Tornado Cash," according to the court filing.

While Stone's lawsuit claimed that the entire crypto lender's portfolio had naked market exposure, Celsius's court filing insists that Stone stole from the lender. "Not only were the defendants incompetent, but they were also thieves," the Celsius countersuit asserts.

"[Stone] misappropriated crypto assets to purchase and steal non-fungible tokens (NFTs) and pocketed seven-figure returns," explains the company's attorney in the court filing.

Stone's attorney asserts that the court filing is an effort to rewrite history.

Following the filing of the lawsuit by Celsius, the partner of Roche Freedman LLP, Kyle Roche, tweeted about the allegations made by Celsius against Stone. "As alleged by Keyfi in the complaint it filed last month, Celsius's CEO Alexander Mashinsky expressly authorized the compensation Keyfi received (including in the form of NFTs)," Roche wrote.

"The transactions at the heart of their complaint were not only publicly visible, but also promoted on Twitter by Mr. Stone." In fact, after Mr. Stone publicized these acquisitions, Celsius and Mr. Mashinsky sent Keyfi tens of millions of dollars more to deploy in defi," said Roche.

Stone's legal counsel added:

Celsius’s most recent filing is an attempt to rewrite history and use Keyfi and Mr. Stone as a scapegoat for their organizational incompetence.