SafeMoon CEO Convicted in Crypto Fraud Case Faces 45 Years

Braden Karony, the CEO of digital asset firm SafeMoon, has been found guilty on all charges in a significant crypto fraud trial. The case revolved around the deception of investors in the digital asset space. After a 12-day hearing in the Eastern District of New York, the jury convicted Karony of conspiracy to commit securities fraud, wire fraud, and money laundering. These charges could result in a prison sentence of up to 45 years.

Prosecutors revealed that Karony and his associates misled SafeMoon investors about the security and integrity of the liquidity pool. They falsely assured investors that executives had no access to the funds and that the funds were not being misused. In reality, Karony and his team siphoned off millions from the pool for personal gain, even as SafeMoon’s market cap soared past $8 billion.

The Justice Department noted that when sentenced, Karony faces up to 45 years in prison. The jury also issued a verdict to forfeit one residential property and the proceeds from the sale of another residential property, amounting to approximately $2 million. The FBI, IRS Criminal Investigation, and Homeland Security Investigations, backed by the SEC, led the investigation. The case, heard over 12 days before U.S. District Judge Eric R. Komitee, exposed how the inner workings of the project sharply diverged from its public promises.

U.S. Attorney Joseph Nocella, Jr. stated, “The SafeMoon digital asset was anything but safe and turned out to be pie in the sky for investors who were deliberately misled by Karony, a man who sought to get rich quick by stealing and diverting millions of dollars.” While the project’s liquidity pools were marketed as “locked” and protected from misuse, prosecutors revealed that Karony and his team secretly retained access and used the funds to bankroll a lavish lifestyle. Nocella added, “Karony used his scheme to purchase multiple homes, sports cars, custom trucks, and other luxury goods.”

Additionally, authorities revealed that Karony concealed his illicit gains by moving investor funds through pseudonymous wallets and unhosted exchange accounts. He ultimately pocketed over $9 million in cryptocurrency. Co-defendant Thomas Smith has already pleaded guilty and is awaiting sentencing. Meanwhile, a third figure, Kyle Nagy, remains on the run. This development comes after the SEC’s recent charges against Unicoin and its top executives, who are accused of misleading investors and raising over $100 million through deceptive claims. The case highlights an intensifying crackdown on fraud in the digital asset space.

In summary, the conviction of Braden Karony underscores the growing scrutiny and legal consequences faced by those involved in crypto fraud. The case serves as a stark reminder of the risks associated with investing in digital assets and the importance of regulatory oversight in protecting investors from deception and misconduct. The legal proceedings against Karony and his associates demonstrate the commitment of law enforcement agencies to hold accountable those who exploit the digital asset market for personal gain, ensuring that justice is served and investor confidence is maintained.