A U.S. federal judge has sentenced Braden John Karony, the former CEO of the defunct cryptocurrency firm Safemoon, to 100 months in federal prison for orchestrating a scheme that defrauded thousands of investors. The sentence, delivered by District Judge Eric Komitee on February 11, 2026, also includes the forfeiture of approximately $7.5 million and two residential properties. The court will determine the final amount of victim restitution at a later date.
The Conviction and Evidence
Karony's sentencing follows his conviction in May 2025 after a three-week trial, where a federal jury found him guilty of conspiracy to commit securities fraud, wire fraud, and money laundering. During the trial, U.S. prosecutors presented evidence that Karony diverted more than $9 million from Safemoon's liquidity pools to fund an extravagant lifestyle. Among the purchases highlighted were a $2.2 million mansion in Utah, high-end sports cars including an Audi R8 and a Tesla, and several custom trucks.
“Karony lied to investors from all walks of life—including military veterans and hardworking Americans—and defrauded thousands of victims in order to buy mansions, sports cars, and custom trucks,” stated United States Attorney Joseph Nocella, Jr.
How the Safemoon Scam Worked
Safemoon gained notoriety in early 2021, reaching a market capitalization of over $8 billion. The token utilized a unique smart contract that applied a 10% tax on every transaction. Investors were told this tax was split, with 5% distributed to existing holders to increase their stakes and 5% deposited into “locked” liquidity pools to ensure market stability. However, the “locked” status was a fabrication. Karony and his co-conspirators retained access to these pools, using complex transaction routing and un-hosted wallets to mask the theft of millions. While publicly denying they traded the token, the defendants frequently sold Safemoon at its peak for personal profit.
One of the co-conspirators, Thomas Smith, pleaded guilty to charges brought against him in February 2025.
Multi-Agency Investigation
The investigation involved a coordinated effort by the FBI, IRS-CI, and Homeland Security Investigations (HSI). “The expertise of IRS-CI special agents in tracing financial transactions outmatched Karony’s intricate schemes,” said IRS-CI Special Agent in Charge Harry T. Chavis, Jr. “His game of hide-and-seek failed, and now he must face justice.” HSI Acting Special Agent in Charge Michael Alfonso echoed the sentiment, noting that the scheme exploited the faith of over a million victims. “HSI New York… will continue to work tirelessly to ensure those who exploit the trust of investors—whether through fiat or cryptocurrency—will face justice.”