Insolvent cryptocurrency lender Celsius Network has filed a lawsuit against staking platform StakeHound for allegedly failing to return $150 million worth of Celsius’s tokens.
Celsius placed 40 million Polygon (MATIC), 66,000 Polkadot (DOT), 25,000 staked native Ether, and 35,000 Ether (ETH), according to a court filing. Celsius emphasized that the total value of these tokens is $150 million.
Celsius received “stTokens” in exchange for the tokens they could use for other investments or return to StakeHound to receive their cryptocurrency back.
StakeHound allegedly demanded arbitration against Celsius and argued that it “has no obligation” to exchange native ETH for stTokens after being confronted with its breaches of duty to Celsius, according to a recent filing.
According to Celsius, StakeHound’s arbitration petition violates United States Bankruptcy Code section 362, also known as the “automatic stay” rule. This rule prohibits creditors from taking legal action against or retrieving debt from a business or individual who has filed for bankruptcy.
In addition, Celsius argued in the filing that “StakeHound should be required to immediately turn over Celsius’ property” and pay compensation for damages caused by its breaches of contractual obligations.
Last year, it was reported that Celsius lost 35,000 ETH while StakeHound lost private keys for approximately 38,000 ETH. The company contends that it is no longer required to repay these assets.
Since filing for bankruptcy nearly a year ago, Celsius has attempted to restructure. On February 15, Celsius presented a reorganization plan that promotes establishing a public platform owned by Earn creators and sponsored by the digital asset investment firm NovaWulf.
