Braden Karony, former CEO of SafeMoon, was convicted by a U.S. federal jury on multiple felony counts including conspiracy to commit securities fraud, wire fraud, and money laundering. The conviction followed a 12-day trial in the Eastern District of New York, where prosecutors detailed a scheme involving the misappropriation of millions of dollars of investor funds. Karony and his alleged co-conspirators misled investors about SafeMoon's liquidity pool, claiming funds were locked to support trading, whereas they retained access and diverted large sums for personal use.
The funds siphoned were spent on luxury real estate and vehicles, such as an Audi R8, Tesla, and custom trucks. Karony also concealed his crypto trading activities through pseudonymous wallets and unhosted accounts on centralized exchanges, personally obtaining over $9 million in assets. One co-defendant, Thomas Smith, the former CTO, has pleaded guilty and cooperated with prosecutors, while another, Kyle Nagy, remains at large, reportedly in Russia.
SafeMoon, once a viral token with a market cap exceeding $8 billion, faced growing regulatory and legal scrutiny for deceptive practices and misuse of investor money. The case has highlighted ongoing federal efforts to crack down on crypto fraud and protect investors. Karony faces up to 45 years in prison upon sentencing. The jury also ordered the forfeiture of certain real estate assets worth about $2 million.
U.S. Attorney Joseph Nocella emphasized that SafeMoon was misleadingly marketed as a safe, decentralized asset, while it was in reality a scheme to enrich insiders at investors’ expense. This conviction is seen as a significant example of legal enforcement against fraudulent activity within the crypto market.