Former Celsius Exec Pleads Guilty To 4 Criminal Charges; Ex-CEO Seeks Dismissal Of FTC Case

Roni Cohen-Pavon, the former chief revenue officer of the now-bankrupt cryptocurrency lending firm Celsius, pleaded guilty to four criminal charges, while the crypto business' ex-CEO Alexander Mashinsky sought the dismissal of his case filed by the U.S. Federal Trade Commission (FTC).

Cohen-Pavon pleaded guilty to four charges, which include manipulation of the exchange's crypto token Cel, securities fraud, and wire fraud, before U.S. District Judge John Koelti in Manhattan during a court hearing Wednesday.

The former Celsius CRO also agreed to help the U.S. Attorney's Office and the U.S. Federal Bureau of Investigation (FBI) with their ongoing investigations and to testify in court if needed, as his plea agreement showed.

Cohen-Pavron and Mashinsky were accused of several criminal allegations in July, including casing out their personal holdings before the crypto lending firm collapsed.

An Israeli citizen, Cohen-Pavon was not in the U.S. when the case was filed. He has a $500,000 bail bond and can travel between Israel and New York. Mashinsky, meanwhile, pleaded not guilty to the charges and was released on a $40 million bond. He sought the dismissal of his case filed by the FTC, a Monday court filing revealed.

"The allegations do not support a claim that Mashinsky knowingly made a misstatement to fraudulently obtain customer information from a financial institution," which is required under the Gramm-Leach-Bliley Act, Mashinsky's lawyers argued.

His camp requested that "the court should grant Mashinsky's motion and dismiss the complaint against him in its entirety."

It further said, "Specific to Mashinsky, in addition to the fact that Celsius is in bankruptcy and entered into a settlement agreement with the FTC, the Complaint cannot substantiate a claim that Mashinsky 'is violating' or is 'about to violate' the law because Mashinsky resigned from his position as CEO of Celsius on September 27, 2023."

Along with Celsius' former Chief Technology Officer Hanoch Goldstein, Mashinsky's camp also insisted that the FTC needs to make more regulations before filing the marketing fraud complaint, which, according to them, is a novel case.

Goldstein, in a separate filing, claimed he was unjustly held guilty by association, with the FTC basing its allegation on the fact that he retweeted a blog by Celsius.

"The FTC's lawsuit against Goldstein is based on nothing more than conclusory, guilt-by-association allegations that have no place in this Court. The FTC advances damaging charges against Goldstein, the former Chief Technology Officer of Celsius Networks ("Celsius")— claiming that he knowingly participated in a scheme to defraud Celsius's consumers out of billions of dollars of cryptocurrency—but fails to allege any actionable and knowing conduct specific to Goldstein to support those charges," the court filing read.