Braden John Karony, the former CEO of cryptocurrency project SafeMoon, has been convicted on multiple felony charges following a two-week trial in the USDistrict Court for the Eastern District of New York. A jury found Karony guilty of conspiracy to commit securities fraud, wire fraud, and money laundering, concluding deliberations in less than a day. He now faces up to 45 years in prison.
Ex SafeMoon CEO Braden Karony Found Guilty of Fraud
Federal prosecutors accused Karony and two associates, former Chief Technology Officer Thomas Smith and SafeMoon founder Kyle Nagy, of misleading investors and siphoning off millions of dollars from SafeMoon’s liquidity pool. While the company claimed that transaction fees collected from users were either redistributed or locked in the pool to stabilize the token, prosecutors said the funds were instead diverted for personal gain.
Smith testified against Karony during the trial, having accepted a plea deal with the government. Nagy, meanwhile, remains at large and is believed to have fled to Russia. The scheme reportedly involved misrepresenting how SafeMoon’s transaction tax worked and maintaining secret access to funds that were promoted as being locked away.
In addition to the conviction, the jury ordered Karony to forfeit assets worth approximately $2 million, including one residential property and proceeds from another. A sentencing date has not yet been set, but Karony could face decades in prison. Smith is expected to receive a reduced sentence due to his cooperation with prosecutors.
Karony had pleaded not guilty and publicly declared his innocence on social media as the trial unfolded. Despite his denials, the evidence presented during the trial persuaded jurors that Karony had orchestrated a significant fraud targeting retail crypto investors.
This case marks another chapter in a broader crackdown on cryptocurrency fraud in the United States. Karony’s conviction follows recent high-profile cases involving former Celsius CEO Alex Mashinsky, who was sentenced to 12 years, and FTX founder Sam Bankman-Fried, who received a 25-year sentence.
US Attorney Joseph Nocella, who recently assumed his role in the Eastern District of New York, said Karony’s actions exemplified the darker side of the crypto industry.
“The SafeMoon digital asset was anything but safe. Karony misled investors and stole millions in a get-rich-quick scheme.”
More crypto industry figures are finding themselves under legal scrutiny. Just days ago, Vladimir Smerkis, co-founder of the Blum platform and former head of Binance’s operations in Russia and the CIS, was arrested in Moscow on charges of large-scale fraud.
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