Celsius Claims $150 Million Debt in New Lawsuit Against StakeHound, the Liquid Staking Platform

Celsius, the Bankrupt Crypto Lender, Takes Legal Action Against StakeHound Over $150 Million in Owed Crypto Assets.

In a recent development, Celsius has initiated a lawsuit against StakeHound, a liquid staking platform, claiming that the company has intentionally failed to fulfill its obligation of returning $150 million worth of digital assets.

According to newly unveiled court documents, Celsius alleges that StakeHound willfully withheld the payment of virtual assets owed to them, prompting the legal action. In their lawsuit, Celsius demands the immediate restitution of the broker’s virtual assets, compensatory damages resulting from the breach of contract, and coverage for the associated legal expenses.

Celsius sheds light on the modus operandi employed by StakeHound, wherein the platform issued “stTokens” to customers in exchange for control over the validator nodes of their staked native tokens. These stTokens could then be utilized in alternative investments, a practice uncommon for staked assets. Subsequently, customers could redeem their native tokens along with any accrued rewards by returning the stTokens to StakeHound.

However, according to Celsius, StakeHound fell short of returning the correct amount of native tokens during the redemption process and instead sought to initiate an arbitration procedure against Celsius.

Stating the breach of contract and other responsibilities, Celsius claims that StakeHound deliberately violated the automatic stay by commencing an arbitration proceeding seeking declaratory relief in Switzerland. Despite Celsius’ demand for the withdrawal of the Swiss arbitration based on the automatic stay, StakeHound disregarded it.

Celsius asserts that it is owed a substantial quantity of crypto assets, including associated rewards. Notable assets include 25,000 Ethereum (ETH) staked in November 2020, 35,000 ETH staked in February 2021, 40 million Polygon (MATIC), and 66,600 Polkadot (DOT) staked in April 2021.”

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Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.