Celsius Network, the bankrupt crypto lender, recently filed a lawsuit against StakeHound, a liquid staking platform, after it was alleged by the company that StakeHound failed to return $150 million worth of tokens owned by Celsius. According to the official court document which was filed by the bankrupt lender, the company had placed around 40 million Polygon, 25,000 staked Ether, 66,000 Polkadot, and 35,000 Ether.
The bankrupt lender also highlighted that the tokens had a worth of $150 million. As an exchange for the tokens, the lender received stTokens, which could be deployed onto other investments or be returned to the liquid staking platform if they wanted to get their crypto back. However, the recent filing went on to allege that the liquid staking platform had demanded some form of arbitration against the lender and claimed that it had no obligation to exchange the native ETH for the stTokens.
Celsius Has Put Out A Court Order For StakeHound To Pay Them Back
According to Celsius, the arbitration by StakeHound violates section 362 of the United States Bankruptcy Code, which is also called the automatic stay rule. This rule does not allow creditors from taking any form of legal action against or collecting debt from a person or company as soon as they end up filing for bankruptcy. Along with that, the lending platform also argued that the liquid staking platform should immediately return Celsius’ property and also pay compensation for the damages that came up as a result of its breach of contractual duties.
Back in 2022, it was reported that Celsius had lost close to 35,000 ETH when StakeHound ended up losing the private keys for around 38,000 ETH. The firm later went on to argue that it had been relieved of its obligation to pay those assets back.