Key Insights
- SafeMoon CEO Braden Karony has been convicted of conspiracy to commit securities fraud, wire fraud, and money laundering.
- He faces up to 45 years in prison for siphoning millions from SafeMoon’s liquidity pool with co-conspirators.
- Karony personally stole over $9 million by trading tokens during price peaks.
Braden Karony, the CEO of SafeMoon has been found guilty of multiple fraud charges in a U.S. federal court.
Karony was once the head of one of the most hyped crypto projects, and is now facing up to 45 years in prison for conspiracy to commit securities fraud, wire fraud, and money laundering. Here’s how the trial and conviction played out.
From Crypto Darling to Criminal Convict
SafeMoon was launched in 2021 and marketed itself as a crypto token with advanced tokenomics. The token included a 10% tax on every transaction, with half “allegedly” redistributed to holders and the other half “supposedly” locked in a liquidity pool to stabilize the market.
At its peak, SafeMoon had a market cap of around $8 billion and was held up by aggressive marketing campaigns and investors who believed in the project.
However, prosecutors argue that behind the scenes, Karony and his inner circle were siphoning millions from the project for personal gain.
Contrary to what they told the public, Karony and the others retained full access to the liquidity pool they wanted to “stabilize the market” with. They also used these investor funds to buy luxury cars, custom trucks, and multiple properties.
The Verdict and Trial
The trial was held in the Eastern District of New York under Judge Eric R. Komitee, and it lasted just under two weeks. It eventually ended with a unanimous decision from the jury, who took less than a day to determine that Karony was guilty. They also ordered the forfeiture of one of the residential properties Karony bought with the stolen money, which was worth about $2 million.
Prosecutors claimed that Karony and his team continuously lied to investors by telling them they did not trade SafeMoon tokens for personal gain. In reality, they actively traded the tokens, especially during price peaks. They used anonymous wallets and unhosted accounts to hide their tracks, and according to court documents, Karony personally stole more than $9 million.
The Co-Conspirators
Karony wasn’t alone in the theft. Thomas Smith, SafeMoon’s former chief technology officer, and Kyle Nagy, the project’s creator, were also indicted in 2023.
Smith flipped and cooperated with authorities, eventually testifying against Karony during the trial. He has pleaded guilty and is awaiting sentencing, with the possibility of a reduced sentence.
Nagy, on the other hand, has yet to face justice. According to reports, he has fled the United States and is believed to be in Russia, where he remains at large. Overall, Karony’s conviction comes amid several similar enforcement actions against fraud in the crypto industry.
His trial came after the recent sentencing of other crypto executives like former Celsius CEO Alex Mashinsky and FTX founder Sam Bankman-Fried, both of whom received 12 and 25-year sentences, respectively.
As of now, no sentencing date has been set for Braden Karony. However, the severity of the charges means he could spend decades behind bars. He has a maximum sentence of 45 years hanging over him, and his fate will likely serve as a story to tell for others in the crypto space.
Meanwhile, Thomas Smith’s cooperation with authorities may help him get a more lenient sentence, while Kyle Nagy’s status as a fugitive leaves one part of the SafeMoon saga open.
Overall, the time of unchecked crypto hype may be over, and a more mature industry could be just beginning.
