Ex-SafeMoon CEO Braden Karony found guilty on all counts in $200 million cryptocurrency fraud case.

A federal jury has found Braden John Karony, a former figure associated with SafeMoon, guilty on all counts connected to a cryptocurrency fraud scheme that defrauded investors out of millions by making misleading claims about decentralized finance security.

During a 12-day trial held in Brooklyn, the jury established Karony’s culpability for conspiracy to commit securities fraud, wire fraud, and money laundering on May 21.

Prosecutors accused him of deceiving investors regarding SafeMoon’s purportedly locked liquidity pools, while he actually accessed and drained these funds for personal gain, including the purchase of luxury properties and vehicles.

Karony now faces a maximum sentence of 45 years in prison. Jurors have also mandated the forfeiture of around $2 million in real estate connected to the fraudulent activities. His sentencing hearing is anticipated later this year.

In addition, Thomas Smith, a co-conspirator, has previously entered a guilty plea and awaits his own sentencing, while the third individual believed to be involved, Kyle Nagy, remains unaccounted for.

The SafeMoon project has subsequently been taken over by its community and rebranded as a memecoin.

### Karony orchestrated a deceptive scheme

In March 2021, Karony and his associates introduced SafeMoon, promoting it as a reliable DeFi token with a self-sustaining liquidity structure.

They asserted that a 10% transaction tax would benefit holders and maintain market liquidity through funding locked liquidity pools. However, in reality, Karony had unfettered access to these pools and diverted millions into his personal accounts.

He misappropriated these funds to acquire a $2.2 million residence in Utah, properties in Kansas, two Audi R8s, a Tesla, and customized trucks.

U.S. Attorney Joseph Nocella stated:

“Karony didn’t create a secure financial product — he established a channel for theft. He plundered investor funds to stock his garages and finance his opulent lifestyle.”

Investigators from the IRS-Criminal Investigation, FBI, and Homeland Security Investigations traced the misused assets through a complex network of anonymous wallets and centralized exchange accounts.

### Complex crypto trail

The IRS-CI, along with its cyber and J5 task forces, meticulously followed the digital footprint to unveil how Karony laundered the funds. They partnered with law enforcement agencies from Australia, Canada, the Netherlands, and the UK to dismantle this international operation.

Harry T. Chavis, Jr., Special Agent in Charge of the IRS-CI, remarked:

“Karony filled his driveways with luxury cars while duping countless individuals. We meticulously tracked his cryptocurrency transactions and revealed the scheme for what it truly was — plain theft.”

The FBI and HSI also verified that Karony obscured his personal SafeMoon transactions during peak trading times, which generated extra illicit profit while publicly claiming there was no insider manipulation of the token.