Roni Cohen-Pavon, the previous chief income officer of the now-bankrupt cryptocurrency lender Celsius Community, has pleaded responsible to U.S. felony prices associated to the collapse of the crypto lending community final yr.
Reuters reported this morning that Cohen-Pavon pleaded responsible to 4 prices, together with manipulating the value of the alternate’s token, CEL.
Cohen-Pavon, together with former CEO and co-founder Alex Mashinsky, was charged in July with market manipulation and wire fraud for artificially inflating the worth of CEL, based on courtroom paperwork.
Fallout
The case is a part of a sequence of prices in opposition to key figures within the crypto lending sector. Crypto lenders resembling Celsius noticed fast development as crypto costs surged in the course of the COVID-19 pandemic, promising straightforward mortgage entry and noteworthy rates of interest to depositors and lending tokens to institutional traders, aiming to revenue from the distinction.
Nevertheless, in 2022, a flurry of buyer withdrawals and a dramatic drop in cryptocurrency costs led to the collapse of crypto lenders like Celsius and FTX as they failed to fulfill these calls for. Mashinsky, nonetheless, reportedly withdrew $10 million from the corporate simply weeks earlier than its chapter.
Mashinsky, who additionally faces civil fraud prices introduced by New York Lawyer Basic Letitia James, has “vehemently” denied the fees and intends to battle them in courtroom. He was launched after his arrest in July on a $40 million bail.
Cohen-Pavon and Mashinsky should not the one high-profile crypto trade figures going through felony or civil prices. Ex-FTX CEO Sam Bankman-Fried and former Terraform Labs CEO Do Kwon are each going through felony prices from the Division of Justice, whereas the U.S. Securities and Change Fee has filed dozens of fits in opposition to numerous actors and tasks, together with main trade gamers resembling Binance and Coinbase.
Cohen-Pavon’s sentencing is scheduled for Dec. 11, 2024, marking a major date within the ongoing saga of authorized proceedings in opposition to key figures within the crypto lending trade.
