The U.S. Department of Justice (DOJ) announced on May 21, 2025, that Braden John Karony, CEO of the crypto project SafeMoon, has been convicted by a federal jury in Brooklyn on all three counts of fraud. The case involves a massive cryptocurrency scheme where Karony misled investors about the project's liquidity pool, secretly gained access to it, and siphoned millions for personal use. At its peak, SafeMoon's market capitalization exceeded $8 billion, but investors later discovered that the liquidity pool was never truly “locked” as claimed.
Charges and Conviction Details
After a 12-day trial, the jury found Karony guilty of conspiracy to commit fraud, securities fraud, and money laundering. Prosecutors argued that Karony and his co-conspirators lied to investors about whether SafeMoon executives could access the liquidity pool and whether they were using its assets for personal benefit. The DOJ stated: “As SafeMoon’s market cap grew to over $8 billion, the defendant fraudulently diverted and misappropriated millions of dollars from the liquidity pool for his personal benefit.”
SafeMoon filed for Chapter 7 bankruptcy in December 2023 after the SEC and its officials accused the project of fraud. Co-conspirator Thomas Smith has already pleaded guilty, while another co-conspirator, Kyle Nagy, remains at large.
Money Laundering and Lavish Spending
Investigators revealed that Karony laundered the illicit proceeds through anonymous exchange accounts and private wallets. He obtained over $9 million from the scheme and spent the proceeds on a $2.2 million home in Utah, multiple Audi R8s, a Tesla, customized Ford and Jeep trucks, and other luxury goods. U.S. Attorney Joseph Nocella commented: “As proven at trial, SafeMoon’s digital assets were anything but safe, and they were far out of reach of investors who were deliberately misled by Karony, a man who sought to get rich quick by stealing and diverting millions of dollars.”
Legal Consequences
Karony now awaits sentencing and faces up to 45 years in federal prison. The jury also ordered forfeiture of a residential property and proceeds from the sale of another property, totaling approximately $2 million. This case marks a significant enforcement action in the crypto space, serving as a warning to those who seek to defraud investors and undermine trust in digital asset markets.