Celsius Sues StakeHound, Seeks to Recover $150M Worth of Crypto

July 16, 2023

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As per the reports, bankrupt crypto lender Celsius Network has brought a legal complaint targeting the liquid staking platform StakeHound for allegedly failing to repay $150 million in ether (ETH), Polygon (MATIC), Polkadot (DOT), and other tokens.

Celsius and StakeHound’s Initial Agreement

In accordance with a court filing submitted by Celsius, the company gave StakeHound the ability to access 25,000 native ETH stakes, 35,000 native ETH, 40 million MATIC, and 66,000 DOT in 2021.

The tokens, worth more than $150 million, have been traded for StakeHound’s liquid stakes called “stTokens,” according to legal documents. Celsius received “stTokens” in return for the tokens, which they could use to make new investments or give back to StakeHound in order to get their cryptocurrency.

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StakeHound Refused to Provide Access to Funds

However, according to the most recent filing, StakeHound requested litigation over Celsius and claimed that it “has no obligation” to swap native ETH for stTokens after being faced by its violations of duty to the crypto lending platform.

StakeHound Needs to Pay Up

Celsius asserts that StakeHound’s arbitration filing disregards the automatic stay rule which prohibits creditors from suing or retrieving debt from a firm or individual shortly after they apply for bankruptcy.

The bankrupt crypto lender additionally stated in the legal action that “StakeHound should be required to immediately turn over Celsius’ property” and compensate the damage for disrespect of its obligations under the contract.

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Celsius Bankruptcy Proceedings are in Full Effect

After a month of halting withdrawals due to liquidity concerns, Celsius Network filed for Chapter 11 bankruptcy in New York. In light of such issues, the corporation chose to work on a variety of strategies for recovering investors’ assets, which appears to have worked out this year, as a previous report said that consumers of the collapsed company would receive up to 72.5% of their cryptocurrency deposits back.

Furthermore, the bankruptcy court has approved Celsius Network’s effort to convert all cryptocurrency-held assets to Bitcoin and Ethereum.