Order Bans KeyFi Founder From Transferring Assets Linked to Celsius

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A temporary restraining order has been approved against Jason Stone, founder of KeyFi, and other entities linked with the staking protocol. Based on the restraining order which was filed on Tuesday, Stone and his colleagues are banned from transferring or removing any asset connected to the bankruptcy case of crypto lender Celsius Network. 

Also, they are not expected to employ the service of Tornado Cash or any other crypto mixers to hide the source of their funds or the location of any property. However, the KeyFi founder still has the liberty to deploy some Non-fungible tokens (NFTs) including Yuga Labs’ CryptoPunks and Bored Ape Yacht Club (BAYC) NFT in Decentralized Finance (DeFi) activities.

Whenever Stone or any of the affected entities feel the need to perform other transactions which are unrelated to the exempted NFTs to avoid liquidation or any other financial woes, they would be required to submit a request notion to the Celsius and the Celsius Official Committee of Unsecured Creditors. For all of these NFT transactions permitted in the temporary restraining order, a bi-weekly statement of profit or loss is expected from Stone and KeyFi.

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Precisely, Celsius and its Official Committee of Unsecured Creditors require that such a statement of account is submitted starting this Friday. 

Celsius And KeyFi at Loggerheads

Since Celsius Network acquired a portion of KeyFi almost three years ago, both entities have been at loggerheads with each other. In 2022, Stone accused Celsius of its involvement in fraud and claimed that the crypto lender ran a Ponzi scheme that utilizes users’ funds to control the price of its CEL token.

According to the filing at the time, the firm said “as customers sought to withdraw their ether deposits, Celsius was forced to buy ether in the open market at historically high prices, suffering heavy losses. Faced with a liquidity crisis, Celsius began to offer double-digit interest rates in order to lure new depositors, whose funds were used to repay earlier depositors and creditors.”

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Barely six weeks later, it was Celsius’ turn to sue KeyFi and its executive. This time around, Celsius Network alleged that KeyFi was engaged in the theft and laundering of cryptocurrency worth millions of dollars.

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