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The former chief revenue officer of the now-defunct Celsius Network, Roni Cohen-Pavon, has pleaded guilty to severe U.S. criminal charges. His actions have spotlighted the questionable practices within some sectors of the crypto industry.
Cohen-Pavon’s admission encompassed a quartet of charges, notably manipulating the CEL token’s price. Consequently, court records unveiled these revelations on Thursday following a Manhattan-based hearing by U.S. District Judge John Koeltl. Besides the manipulation, other counts included securities fraud and wire fraud.
Celsius’s Pandemic Boom
Crypto lending platforms like Celsius saw exponential growth as the COVID-19 pandemic took the world by storm. They tantalized depositors with remarkable interest rates and promises of effortless loan access. Additionally, they aimed to make considerable profits by lending tokens to sizable institutional investors.
However, Celsius faced a tumultuous downfall with a massive wave of customer withdrawals that coincided with a slump in cryptocurrency prices, causing a domino effect in the industry.
Notably, Celsius wasn’t alone in this downward spiral. Several cryptocurrency entities, including the FTX exchange, declared bankruptcy. Moreover, the swift and unpredictable changes in crypto prices and interest rates have led to heightened scrutiny from regulatory bodies.
Legal Proceedings and Future Implications
The U.S. Attorney’s office in Manhattan and the FBI will witness Cohen-Pavon’s assistance in their ongoing investigations since he has committed to testify in court if summoned. Interestingly, this development comes after prosecutors disclosed that Alex Mashinsky, the former CEO of Celsius, profited $42 million from suspicious sales.
However, Mashinsky, despite the looming allegations, remains steadfast in his innocence and is currently out on a significant $40 million bond.
Damian Williams, Manhattan’s federal prosecutor, shed light on Cohen-Pavon’s prior absence from the country. Significantly, he has been allowed bail set at $500,000 and has the liberty to travel between New York and his home country, Israel.
In light of Cohen-Pavon’s cooperation agreement, whether his assistance will impact his sentencing, scheduled for December 11, 2024, is yet to be witnessed. Given the ongoing shifts and revelations in the crypto world, stakeholders await the trial with bated breath.
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