Prominent Twitter account 0xb1 exposes financial lending platform Celsius for lying, claiming they have not implemented proper risk management.

The financial lending platform Celsius has become the first well-known platform to halt user deposits, withdrawals, and trading since the debt crisis involving 3AC Three Arrows Capital. Following this, centralized lending platforms such as BlockFi, Voyager, and Babel Finance have also reported mismanagement issues. The impact of 3AC has been significant, and Celsius has had negative news in the past regarding opaque funding and high-risk investments. NFT influencer account 0xb1 disclosed information on the mishandling of user assets by Celsius on the 8th.

The True Identity of 0xb1

The 0xb1 account first explained its origins with Celsius. This account and address are managed collectively by a group of talented individuals, with Jason Stone as the leader from August 2020 to April 2021. Jason Stone has been focusing on optimizing yield strategies and founded KeyFi in 2019, providing multi-party computation (MPC) solutions. Investigations show that KeyFi had indeed announced a partnership with Celsius in the second quarter of 2020.

Is the Truth About Celsius Insolvency? Lack of Risk Management

Jason Stone stated that in mid-2020, Celsius began acquiring KeyFi's company assets and team, and started deploying DeFi strategies for Celsius. In August 2020, the 0xb1 team was established, and Celsius also entrusted client assets to be managed by 0xb1. Jason Stone mentioned that before parting ways with KeyFi, Celsius shared private keys with them and collectively managed nearly $2 billion in assets. Celsius monitored 0xb1's investment strategies and performance through the HedgeGuard and DeBank blockchain asset data platforms.

No Risk Management at All?

Jason Stone mentioned that Celsius' risk management team confirmed to him that the trading team had hedged against potential impermanent loss and managed risks related to price volatility in 0xb1's activities in liquidity pools.

By February 2021, Jason Stone claimed that Celsius had deceived them by not actually hedging against impermanent loss or price volatility. The entire company's investment portfolio was directly exposed to the market.

After discovering this issue, in March 2021, 0xb1 terminated its partnership with Celsius, unwound several positions over the following months, and ultimately concluded in April 2021 with profits exceeding $800 million.

Thief of Impermanent Loss?

When 0xb1 exited DeFi positions, Celsius suffered significant impermanent losses, initially suspecting 0xb1 of stealing funds. Even after understanding what impermanent loss was, Celsius still held Jason Stone responsible, forgetting their commitment to hedging and the transparency of these strategies.

Entangled Disputes

Jason Stone mentioned spending over a year trying to quietly handle the dispute with Celsius. According to the contract, Celsius owed KeyFi a significant sum of money. He believed Celsius had major asset vulnerabilities and refused to acknowledge the truth and failures in risk management and accounting, instead shifting blame onto him.

Where is the Truth of Insolvency?

Jason Stone stated that there have been ongoing suspicions about Celsius' insolvency. He observed that Celsius has refused to accept the truth and legal action may be necessary to reveal everything. He has already filed a lawsuit.

https://mobile.twitter.com/0x_b1/status/1545153673445113857