Braden John Karony, the CEO of crypto and blockchain company, SafeMoon, was found guilty on all counts of a three-count indictment related to securities fraud, wire fraud, and money laundering. The verdict was delivered earlier today at a federal courthouse in Brooklyn, following a 12-day trial.
Karony Found Guilty In SafeMoon Scandal
The charges stemmed from Karony’s involvement in allegedly defrauding investors of SafeMoon, a decentralized finance (DeFi) digital asset that his company, SafeMoon LLC, issued.
Prosecutors alleged that Karony and his co-conspirators misled investors about their ability to access the liquidity pool and whether they were using these funds for personal gain. As SafeMoon’s market capitalization soared to over $8 billion, Karony fraudulently diverted millions from the liquidity pool for personal enrichment.
Upon conviction, Karony faces a potential prison sentence of up to 45 years. The jury also ordered the forfeiture of one residential property and the proceeds from another, totaling approximately $2 million.
US Attorney Joseph Nocella, Jr. expressed strong condemnation of Karony’s actions, stating, “The SafeMoon digital asset was anything but safe and turned out to be pie in the sky for investors who were deliberately misled.” Nocella noted that Karony used the embezzled funds to finance a lavish lifestyle, acquiring multiple homes and luxury vehicles.
Fraudulent Practices Of CEO Braden Karony
The investigation was a collaborative effort involving several agencies, including the FBI and the IRS. FBI Assistant Director Christopher G. Raia remarked, “Karony violated his clients’ trust and wallets while attempting to conceal his misconduct through discrete transactions.”
IRS Special Agent in Charge Harry T. Chavis, Jr. added that the case highlighted the importance of tracking cryptocurrency movements to hold wrongdoers accountable. “The name of his company is SafeMoon, but there was nothing safe about this investment,” he stated.
SafeMoon tokens, first issued in March 2021, operated on a public blockchain and imposed a 10% tax on every transaction. This tax was designed to benefit both holders and the liquidity pool, with 5% returned to holders and the other 5% deposited into liquidity pools. Initially, SafeMoon attracted millions of investors, boasting a market capitalization exceeding $8 billion.
Prosecutors detailed how Karony and his team misrepresented key aspects of the SafeMoon offering. They falsely claimed that liquidity pools were “locked” to prevent insider fraud and that tokens would only be used for legitimate business purposes.
In reality, they retained access to these pools, diverting millions for personal gain while publicly denying any personal trading of SafeMoon. Karony’s illicit activities included the use of multiple crypto wallets and complex transaction routes to obscure the movement of stolen funds.
He is reported to have generated over $9 million from the scheme, using these proceeds to fund extravagant purchases, including a $2.2 million home and luxury vehicles like Audi R8 sports cars and custom trucks.
Featured image from DALL-E, chart from TradingView.com
