KeyFi INC v Celsius Network Limited and Celsius KeyFi LLC
Looking at the complaint KeyFi filed against Celsius
Yesterday I saw this thread from 0x_b1
I’m not sure if this is the first time Jason Stone has confirmed his identity as 0x_b1, but it was interesting nonetheless.
For those that do not know, I have a law degree and will try to share my trained insight (though not legal advice) into the complaint referenced (let me know if the link works, complex with the chrome extension for pdf viewer).
Complaints:
The first thing to point out is a civil trial, meaning no charges or crimes are brought forth by the government. It is between two private citizens where one citizen felt harmed by the other.
The complaints are part of the initial process for the affected party to receive compensation from those that harmed them.
From a blog post I found that described it pretty well:
Civil complaints are documents that initiate court lawsuits where one private person or entity claims to have been harmed by another private person or entity. The plaintiff files the complaint and sets forth a claim of damages that were allegedly caused by the defendant. Civil complaints also describe the relief sought by the plaintiff and explain why that person or entity is entitled to it.
Now, another essential thing to note is that complaints are not evidence; just because the complaint says it happened doesn’t mean that it happened that way, or a court of law or jury will even find it that way. Lawyers write the complaint as persuasively as possible, advocating for their client’s interest. Not saying complaints lie, but they can bend the truth that, after some digging, does not hold up to the claim.
Here I will take different pieces of the complaint I found interesting and put them here. In no way is this a thorough review.
Establish the court’s power:
The complaint can be significant, but it is all for naught if the court doesn’t have the legal authority to enforce it. The original contract between KeyFi and Celsius stated they agreed that New York County courts would be the court if there were any future disputes. Here the complaint lays out why they think New York is an appropriate venue.
Provide enough basis that the defendant might have committed harm:
Here the argument is that Celsius and KeyFi had a contract. And that Celsius never paid KeyFi. Thus KeyFi is entitled to payment; how much, though, is up to the trial to decide.
Describe appropriate compensation
As mentioned, the compensation is going to be determined at trial, but what I found interesting was the acknowledgment it is tough to calculate crypto back to USD.
Conclusion
In the future, contracts with crypto as payment will have to be iron clad and very descriptive of the payment schedule and if the denomination will be in USD or Crypto Assets. Also - stating “profit” leaves a lot of wiggle room because crypto accounting can show that nothing is in profit or everything is in profit as you constantly toggle back and forth.
I’m sure we will get some Forex-style regulations in the sense of constantly using different currency exchanges, but crypto is nowhere near as mature.
These payment schedules, I think, will become one of the more exciting crypto contract writings in the coming years. And I expect we will see more of these lawsuits coming forward.
My posts aren’t financial or legal advice. I'm doing daily journals of my life in crypto