Former SafeMoon CEO Braden Karony built a system for embezzlement, funneling investor funds through a network of pseudonymous wallets and laundering the proceeds.
A federal jury convicted former SafeMoon executive Braden John Karony on all counts for his role in a cryptocurrency fraud scheme that siphoned millions from investors through misleading assurances of decentralized finance security.
The jury found Karony guilty on charges of conspiracy to commit securities fraud, wire fraud, and money laundering after a 12-day trial held in Brooklyn on May 21.
Prosecutors accused Karony of deceiving investors about the security of SafeMoon’s locked liquidity pools, while he secretly accessed the funds and diverted them to buy luxury properties and vehicles.
Karony now faces a potential prison sentence of up to 45 years. The jury also ordered the forfeiture of approximately $2 million in real estate assets connected to the scheme. The court has scheduled his sentencing for later this year.
Meanwhile, co-conspirator Thomas Smith previously entered a guilty plea and is awaiting sentencing. The third alleged participant, Kyle Nagy, has not yet been apprehended and remains at large.
Meanwhile, the SafeMoon project has been taken over by the community and has been rebranded as a memecoin.
Karony Found Guilty in $200M Crypto Fraud Scheme
Karony and his co-conspirators launched SafeMoon in March 2021 and marketed it as a secure decentralized finance (DeFi) token with a self-sustaining liquidity mechanism.
The founders claimed that a 10% tax on each transaction would reward holders and boost market liquidity by funding locked pools. In reality, Karony retained full access to those liquidity pools and funneled millions of dollars into personal accounts.
He used the misappropriated funds to purchase a $2.2 million residence in Utah, additional properties in Kansas, two Audi R8s, a Tesla, and several customized trucks.
According to a statement issued by U.S. Attorney Joseph Nocella:
Karony didn’t build a safe financial product — he built a pipeline for theft. He looted investor funds and used them to fill his garages and bankroll his lifestyle.
Agents from IRS-Criminal Investigation, the FBI, and Homeland Security Investigations traced the misappropriated assets through a complex network of pseudonymous wallets and centralized exchange accounts.
Crypto Fraud Unraveled Through Complex Digital Trail
IRS-CI and its cyber and J5 task forces followed the digital trail and uncovered how Karony laundered the funds. They dismantled the cross-border operation in collaboration with enforcement partners from Australia, Canada, the Netherlands, and the UK.
IRS-CI Special Agent in Charge Harry T. issued a statement.
Karony lined his driveways with sports cars while deceiving millions. We tracked his crypto movements and exposed the scheme for what it was — outright theft.
Chavis, Jr., who remarked:
The FBI and HSI confirmed that Karony concealed his personal trades of SafeMoon during peak price periods, generating illicit profits while publicly assuring investors that no insider manipulation was taking place.
