Roni Cohen-Pavon, the former chief revenue officer of the now-defunct cryptocurrency lending firm Celsius Network, has pleaded guilty to multiple criminal charges in the US.
Cohen-Pavon admitted to four charges including conspiracy to commit price manipulation, securities fraud, manipulation of security prices, and wire fraud during a hearing before US District Judge John Koeltl in Manhattan.
He has agreed to cooperate fully with the ongoing investigations led by the US Attorney’s office in Manhattan and the FBI into the 2022 Celsius collapse.
Earlier this year, Celsius Network’s founder Alex Mashinsky was charged with fraud and conspiracy in collaboration with Cohen-Pavon to artificially inflate the price of the Celsius CEL token and mislead investors.
Mashinsky has pleaded not guilty to all charges and was released on a $40 million bond.
Mashinsky is also the subject of a civil fraud lawsuit filed by New York Attorney General Letitia James. The lawsuit accuses him of defrauding hundreds of thousands of investors through false and misleading representations.
The Celsius Network, once a prominent player in the cryptocurrency, promised substantial returns to investors through its ‘Earn’ product.
It filed for Chapter 11 bankruptcy protection in July 2022 following a series of customer withdrawals and a significant market downturn. The collapse left customers’ funds, amounting to up to $4.2 billion, locked in the bankruptcy estate indefinitely.
An independent court-appointed examiner found that the business model Celsius advertised was vastly different from its actual operations, likening it to a Ponzi scheme.
The report highlighted misleading promises of “financial freedom” and a lack of transparency in the company’s dealings. Furthermore, it was revealed that several executives, including Mashinsky, withdrew millions from Celsius accounts shortly before the bankruptcy filing.
Celsius was one of many high-profile crypto collapses in 2022, starting with Three Arrows Capital in May and culminating in the monumental collapse of FTX, formerly the second-largest cryptocurrency exchange globally, in November.
