Former SafeMoon chief executive Braden Karony has been sentenced to 100 months in prison after U.S. prosecutors proved he stole millions in customer funds for personal use. The sentence was handed down Monday in federal court in Brooklyn, after a jury last May found him guilty of conspiracy to commit securities fraud, wire fraud, and money laundering.
Karony was also ordered to forfeit $7.5 million and two residential properties. He must also pay restitution, though the final amount has not yet been determined. In a statement, U.S. Attorney Joseph Nocella, Jr said Karony deceived investors from many backgrounds, including military veterans and working Americans, and used the scheme to buy mansions, sports cars, and custom trucks.
A 10% transaction tax was sold as investor protection
Court filings said Karony worked with Thomas Smith, SafeMoon’s former chief technology officer, and project creator Kyle Nagy in a fraud scheme that affected more than 1 million investors. The group imposed a 10% tax on every transaction and promoted it as a way to support liquidity pools that were supposedly locked against insider withdrawals.
Federal prosecutors showed that the defendants secretly retained access to those pools and used them as a slush fund to support a lavish lifestyle. The case turned on that hidden control over the funds and the mismatch between public claims and actual access.
SafeMoon once topped an $8 billion valuation
The SafeMoon token, SFM, reached a market capitalization of more than $8 billion during the 2021 crypto boom. After the fraud was exposed and the company entered bankruptcy in late 2023, the token fell by more than 98%.
Among the other defendants, Thomas Smith pleaded guilty in February 2025 and testified against Karony under a deal tied to his sentencing. Kyle Nagy, the project’s creator, remains at large, and some reports say he may have fled to Russia.