SafeMoon CEO Guilty of Fraud, Faces 45 Years in Prison

Braden Karony, the CEO of SafeMoon, was found guilty in a U.S. federal court on charges of conspiracy to commit securities fraud, wire fraud, and money laundering. The verdict came after a 12-day trial in the Eastern District of New York, where Karony was accused of misappropriating millions of dollars in investor funds. The jury also ordered the forfeiture of one residential property and the proceeds from the sale of another, totaling approximately $2 million. Karony faces up to 45 years in prison when sentenced.

Prosecutors alleged that Karony and his co-conspirators misled investors about the structure and safety of SafeMoon, a token issued in 2021 that applied a 10% transaction tax on transfers. Half of this fee was purportedly redistributed to token holders, while the remainder was said to be locked in a liquidity pool to support trading. However, the Justice Department claimed that Karony and others retained access to the liquidity pool and diverted substantial funds for personal use, including purchasing multiple properties and luxury vehicles such as an Audi R8 and Tesla.

Karony is accused of concealing his trading activity and use of investor funds through a series of pseudonymous wallets and unhosted accounts on centralized exchanges. He personally obtained more than $9 million in crypto assets from the scheme. One co-defendant, Thomas Smith, has pleaded guilty and is awaiting sentencing, while another, Kyle Nagy, remains at large. The case was investigated by the FBI, IRS Criminal Investigation, and Homeland Security Investigations, with assistance from the U.S. Securities and Exchange Commission.

Prosecutors emphasized that the scheme undermined investor confidence in digital assets and contributed to broader concerns about fraud in the crypto market. The SafeMoon token once reached a market cap of more than $8 billion before collapsing amid fraud allegations. The conviction of Karony sends a strong message to the cryptocurrency industry about the consequences of fraudulent activities, highlighting the importance of transparency and honesty in the crypto market. The case serves as a reminder that regulators are closely monitoring the industry and that those who engage in fraudulent activities will be held accountable. The outcome of the trial is likely to have a significant impact on the cryptocurrency industry, as it sets a precedent for future cases involving fraud and misrepresentation.