A U.S. federal court has sentenced Braden John Karony, the former CEO of the now-defunct crypto project Safemoon, to 100 months in prison for defrauding investors. District Judge Eric Komitee also ordered Karony to forfeit $7.5 million and two properties, while restitution for victims will be determined at a later stage.
Convictions tied to fraud and money laundering conspiracy
Karony was convicted after a trial in May 2025 on charges including conspiracy to commit securities fraud, wire fraud, and money laundering. Prosecutors argued that he misappropriated more than $9 million from Safemoon’s liquidity pools and used the funds to support a lavish personal lifestyle. Court filings highlighted purchases such as a $2.2 million mansion and luxury vehicles.
Liquidity pool claims were central to the case
Safemoon once reached a market capitalization of about $8 billion, drawing in a large base of retail investors during its peak. Prosecutors said the project falsely told investors that its liquidity pools were “locked,” creating the impression that insiders could not freely access those funds. In reality, Karony and associates were able to secretly access and profit from the pools, a contradiction that became a key element in the government’s case.
Multi-agency investigation affected over 1 million investors
The investigation involved several U.S. agencies, including the FBI and IRS Criminal Investigation, underscoring the scale of the alleged misconduct. Authorities said the fraud impacted more than 1 million investors, making the case one of the more prominent enforcement actions tied to misleading practices in the crypto sector.
The sentencing adds to ongoing regulatory and criminal scrutiny of digital asset projects that make inaccurate claims about liquidity, fund controls, or investor protections. With the prison term now imposed, market attention is likely to turn to the upcoming restitution process and how recovered assets may ultimately be distributed to victims.