Roni Cohen-Pavon, a former executive at the bankrupt cryptocurrency lender Celsius Network, pleaded guilty to criminal charges in the United States.

Notably, Cohen-Pavon has also agreed to collaborate with investigators in their ongoing investigation.

Cohen-Pavon Pleads Guilty

During a hearing held on Wednesday before U.S. District Judge John Koeltl in Manhattan, Cohen-Pavon confessed to four charges, including manipulating the crypto token CEL’s price, according to court records released on Thursday.

As part of his guilty plea, Cohen-Pavon has committed to assisting the U.S. attorney’s office in Manhattan and the FBI with their investigations. Additionally, he is willing to testify in court if required, as detailed in his plea agreement.

Given Cohen-Pavon’s cooperation, prosecutors may ask Judge Koeltl to consider it during his Dec. 11, 2024, sentencing, which may have significant implications for the ongoing investigation into cryptocurrency market manipulation.

The charges against Cohen-Pavon and Celsius Network’s founder, Alex Mashinsky, were initially filed in July. Both were accused of market manipulation and wire fraud, specifically related to artificially inflating the value of the CEL token and selling their personal holdings just before Celsius Network’s collapse in July 2022.

In contrast to Cohen-Pavon’s plea, Mashinsky has pleaded not guilty and was released on a $40 million bond. According to Damian Williams, the chief federal prosecutor in Manhattan, Roni Cohen-Pavon, an Israeli citizen, was not in the country when the charges were filed against him. He is currently released on a $500,000 bond and allowed to travel between New York and Israel.

The Fall of Crypto Lenders

Celsius Network’s downfall highlights the challenges crypto lending platforms faced during the COVID-19 pandemic. These platforms attracted depositors with the promise of easy loan access and high interest rates but ended up lending tokens to institutional investors for profit. However, when cryptocurrency prices declined, Celsius Network faced numerous customer withdrawals, ultimately collapsing.

Celsius Network’s fate was among the earliest instances of cryptocurrency-related bankruptcies, with others, such as the FTX exchange, also facing financial difficulties as crypto markets experienced significant volatility.

Furthermore, the office of Damian Williams has brought charges against several other crypto industry executives for fraud, including FTX founder Sam Bankman-Fried, who pleaded not guilty and is scheduled for trial on Oct. 3, 2023.