Celsius, a lending platform, has initiated legal action against StakeHound in an effort to recover $150 million worth of ether (ETH), polygon (MATIC), and polkadot (DOT).
Celsius alleges that StakeHound, a third party entrusted with the tokens, failed to fulfill its obligations, leading to significant losses for Celsius.
Celsius asserts that in January and February 2021, it entrusted StakeHound with 25,000 native ETH ($47 million) and 35,000 native ETH ($65.9 million) respectively.
However, StakeHound’s third-party security provider allegedly lost the private keys associated with the 35,000 native ETH from February.
StakeHound claimed that due to the key loss, it was relieved of its obligation to return both the 35,000 ETH and the initially entrusted 25,000 ETH.
In addition to ETH, Celsius also entrusted StakeHound with 40 million MATIC ($29.1 million) and 66,000 DOT ($342,000) two years prior. In return, StakeHound issued “stTokens” to Celsius.
According to Celsius, these tokens were supposed to be locked until the activation of ETH withdrawals following the Shapella fork in April 2023. Celsius alleges that StakeHound failed to return the native tokens in May this year, which are now valued at over $150 million.
Celsius’s legal team is demanding that StakeHound immediately return Celsius’ property and provide compensatory damages for breaching contractual obligations.
The lawsuit also seeks damages, sanctions, and attorneys’ fees associated with StakeHound’s alleged misconduct.
In late June, Celsius obtained court approval to convert tokens to BTC and ETH as part of its plan to compensate customers after a year of bankruptcy proceedings. This move aims to rectify the losses incurred during the bankruptcy period.
