Celsius files lawsuit to recover $150M from staking platform StakeHound

Bankrupt crypto lender Celsius Network has filed a lawsuit against liquid staking platform StakeHound after the company allegedly failed to return $150 million worth of tokens owned by Celsius. 

According to a court document filed by Celsius, the company placed 40 million Polygon (MATIC), 66,000 Polkadot (DOT), 25,000 staked native Ether and 35,000 Ether (ETH). Celsius highlighted that these tokens are worth a total of $150 million.

In exchange for the tokens, Celsius received “stTokens” which they could deploy on other investments or return to StakeHound to get their crypto back. However, the recent filing alleged that StakeHound demanded arbitration against Celsius and argued that it “has no obligation” to exchange native ETH for the stTokens after it was confronted by its breaches of duty to Celsius.

According to Celsius, StakeHound’s arbitration filing violates section 362 of the United States Bankruptcy Code which is also known as the “automatic stay” rule. This is a rule that disallows creditors from taking legal action against or collecting debt from a company or person as soon as they file for bankruptcy.

In addition, Celsius also argued in the filing that “StakeHound should be required to immediately turn over Celsius’ property” and pay compensation for damages that arose from its breaches of contractual duties.

Cointelegraph reached out to Celsius Network and StakeHound for comments but did not get a response.

Related: CFTC investigators conclude ex-Celsius CEO Mashinsky broke US rules: Report

Last year, it was reported that Celsius lost 35,000 ETH when StakeHound lost private keys for a total of around 38,000 ETH. The firm argues that it has been relieved of its obligation to pay back these assets.

Since its bankruptcy filing almost a year ago, Celsius has been trying to make an effort to restructure. On Feb 15, Celsius presented a restructuring plan that pushes for the creation of a public platform owned by Earn creators which will be sponsored by digital asset investment firm NovaWulf. 

Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.

Magazine: Crypto regulation — Does SEC Chair Gary Gensler have the final say?

Source: Read Full Article