The U.S. Department of Justice (DOJ) announced on May 21, 2025, that Braden John Karony, the chief executive officer of digital asset firm SafeMoon LLC, was found guilty by a federal jury in Brooklyn on all three charges in a crypto-fraud case involving the misappropriation of investor funds. Karony faces a maximum sentence of 45 years in prison and was ordered to forfeit approximately $2 million worth of residential properties.
Fraud Scheme: Lying About Locked Liquidity Pool
Prosecutors demonstrated that Karony and his co-conspirators deliberately misled investors by claiming that SafeMoon's liquidity pool was “locked” and inaccessible to executives. In reality, they maintained secret access and siphoned millions of dollars from the pool for personal gain. At its peak, SafeMoon's market capitalization exceeded $8 billion. The stolen funds were used to purchase multiple homes in Utah and Kansas, luxury vehicles including several Audi R8s, a Tesla, and custom trucks, along with other extravagant items.
Trial and Sentencing: Guilty Verdict After 12-Day Trial
The case was tried over 12 days before U.S. District Judge Eric R. Komitee. The jury quickly reached a verdict, finding Karony guilty on all counts. In addition to criminal penalties, the jury ordered the forfeiture of one residential property and the proceeds from the sale of another, totaling about $2 million. SafeMoon had filed for Chapter 7 bankruptcy in December 2023 after the U.S. Securities and Exchange Commission (SEC) filed fraud charges against the company and its executives.
Money Laundering and Fugitive Co-Conspirator
Investigators uncovered that Karony laundered the illicit gains through pseudonymous exchange accounts and private wallets in an attempt to hide the proceeds. The scheme netted over $9 million. His associate Thomas Smith has already pleaded guilty, while another co-conspirator, Kyle Nagy, remains at large. U.S. Attorney Joseph Nocella stated: “Today’s guilty verdict should serve as a warning to all would-be fraudsters that my Office will vigorously prosecute individuals who victimize digital asset investors and undermine confidence in digital asset markets.” The case highlights the ongoing regulatory crackdown on fraudulent projects in the cryptocurrency space and sets a significant precedent for investor protection.