SafeMoon Scandal Ends With 8-Year Sentence for Ex-CEO
Braden John Karony, SafeMoon’s former CEO, has been sentenced to eight years in jail for his function in a multi-million greenback crypto fraud scheme.
U.S. District Judge Eric Komite handed out the judgment in a Brooklyn federal courtroom after a jury convicted him in May 2025 following a three-week trial.
Details of The Sentencing
Court paperwork show that Karony was discovered responsible of conspiracy to commit securities fraud, wire fraud, and cash laundering. As a part of the ruling, he has been ordered to forfeit roughly $7.5 million, whereas the quantity of restitution to victims will probably be decided at a later date. The jury additionally issued a verdict instructing the forfeiture of two residential properties.
Meanwhile, one in every of his co-conspirators, Thomas Smith, pleaded responsible in February 2025 and is awaiting sentencing, whereas Kyle Nagy stays at massive.
“Karony lied to buyers from all walks of life—together with army veterans and hard-working Americans—and defrauded 1000’s of victims with the intention to purchase mansions, sports activities automobiles, and customized vans,” stated United States Attorney Joseph Nocella, Jr.
FBI Assistant Director in Charge James C. Barnacle stated the previous government abused his place and betrayed buyers’ belief by stealing greater than $9 million in cryptocurrency to finance a lavish life-style. The proceeds have been used to buy luxurious automobiles and actual property, together with a $2.2 million house in Utah, extra houses in Kansas, a $277,000 Audi R8 sports activities automotive, a Tesla, a customized Ford F-550, and Jeep Gladiator pickup vans.
IRS-CI New York Special Agent in Charge Harry T. Chavis added that Karony carried out the scheme by exploiting his entry to SafeMoon’s liquidity pool whereas making an attempt to hide the transactions, which regulation enforcement finally traced, exposing the scheme.
Liquidity Pool Misrepresentations
SafeMoon tokens have been launched in March 2021 by the agency on a public blockchain, with every transaction robotically topic to a ten% tax that was break up into two 5% tranches. One was meant to be mirrored to holders in proportion to their holdings, growing their token balances, whereas the remaining 5% was designated for its swimming pools to spice up market liquidity.
In the months following its debut, SafeMoon attracted hundreds of thousands of shoppers and reached a market capitalization exceeding $8 billion.
Prosecutors claim that Karony and his companions lied about necessary particulars of the corporate, together with false statements that its reserves have been locked and couldn’t be used for private causes, that tokens would solely be used for particular enterprise functions, that digital asset pairs could be added to the liquidity pool manually when trades occurred on sure exchanges, and that the builders weren’t utilizing or buying and selling SafeMoon for their very own achieve.
In actuality, they retained entry to the liquidity swimming pools and diverted hundreds of thousands of {dollars}’ price of crypto for private enrichment.
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