A federal jury has convicted SafeMoon CEO Braden John Karony on three counts of fraud stemming from a crypto scheme that allegedly defrauded investors of millions of dollars. Karony could face up to 45 years in prison on charges of conspiracy to commit securities fraud, wire fraud, and money laundering, the U.S. Attorney’s Office for the Eastern District of New York said in a Wednesday release.Â
In 2021, SafeMoon LLC issued the digital assets known as SafeMoon, which once reached a market cap of more than $8 billion. The cryptocurrency had a 10% tax on every transfer. While the project told investors that half of the 10% fee would be “locked” in a liquidity pool, U.S. prosecutors said that Karony and co-conspirators fraudulently diverted millions in liquidity from the pool for personal gains.
“As proven at trial, 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,” said Attorney Joseph Nocella, Jr.
While Karony claimed company executives did not hold or trade SafeMoon, prosecutors said they repeatedly bought and sold the cryptocurrency to make millions in illicit profits, which they concealed through a “labyrinth” of private, unhosted wallets, transaction routing and pseudonymous accounts on centralized exchanges.
Karony alone allegedly made more than $9 million in crypto assets, which he used to purchase millions of dollars’ worth of real estate and several luxury automobiles, including two Audi R8 sports cars, a Tesla, and more. Co-conspirator Thomas Smith previously pleaded guilty and is awaiting sentencing, while another co-conspirator Kyle Nagy is still at large. Meanwhile, Karony repeatedly wrote on X that he is innocent and did not commit fraud.
