Braden Karony, the former CEO of crypto project SafeMoon, was found guilty on all charges of conspiracy to commit securities fraud, wire fraud, and money laundering by a federal jury in the Eastern District of New York. The verdict, delivered on May 21 following a 12-day trial, marks one of the harshest legal outcomes in recent crypto enforcement history.
Karony now faces up to 45 years in prison and the forfeiture of millions in fraudulent gains.
Prosecutors Detail Elaborate Deception Scheme
Throughout the trial, federal prosecutors argued that Karony and other SafeMoon insiders executed a coordinated scheme to deceive investors and manipulate token markets. Central to their claims was the false assurance that SafeMoon’s liquidity pools were “locked” and immune to rug pulls, thanks to a 10% transaction tax.
In reality, the team maintained unrestricted access to the liquidity pools. Prosecutors presented evidence that Karony and others secretly traded tokens at market highs, siphoned profits into private wallets, and misled buyers into believing the funds would only serve project development—not personal gain.
Luxury Purchases Funded by Fraud Proceeds
Karony is said to have personally netted over $9 million from these schemes. The funds were used to purchase multiple high-end assets, including a $2.2 million home in Utah, a second Utah property, and a residence in Kansas. His luxury car collection reportedly includes two Audi R8s, a Tesla, and custom-built Ford and Jeep trucks.
One of Karony’s co-defendants, Thomas Smith, cooperated with authorities and testified in exchange for a possible reduced sentence. Meanwhile, platform founder Kyle Nagy remains at large, allegedly having fled to Russia. The jury has also ordered the forfeiture of at least one residence and proceeds from another—totaling roughly $2 million.
A Verdict with Ripple Effects Across Crypto Regulation
The case was prosecuted by the Justice Department’s Business and Securities Fraud section, with support from Assistant US Attorneys Dana Rehnquist, Sara Winik, Jessica Weigel, and forfeiture specialist Laura Mantell.
“This verdict sends a clear message,” said US Attorney Jaqueline Romero Nocella. “SafeMoon was anything but safe—Karony turned it into a vehicle for luxury and deception. We will not hesitate to pursue those who exploit digital assets for personal gain.”
Karony’s conviction follows the recent sentencing of Celsius founder Alex Mashinsky and FTX’s Sam Bankman-Fried—highlighting the U.S. government’s increased scrutiny on crypto project executives and signaling that investor betrayal will carry significant legal consequences.
