A United States federal court has sentenced Braden John Karony, the former CEO of the defunct crypto project Safemoon, to 100 months in federal prison for orchestrating a massive investor fraud scheme. District Judge Eric Komitee also ordered Karony to forfeit approximately $7.5 million and two residential properties. The final amount of victim restitution will be determined at a later date.
The Fraud: Lies and Luxury Living
Karony’s sentencing followed a three-week trial in May 2025, where a federal jury found him guilty of conspiracy to commit securities fraud, wire fraud, and money laundering. Prosecutors proved that Karony diverted more than $9 million from Safemoon’s liquidity pools to finance an extravagant lifestyle. Court documents cited purchases including a $2.2 million mansion in Utah, an Audi R8, 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,” said United States Attorney Joseph Nocella, Jr. “Justice has been served today.”
The Rise and Fall of Safemoon: From $8 Billion to Collapse
Safemoon gained notoriety in early 2021, reaching a market capitalization of over $8 billion. The token operated with a unique smart contract that applied a 10% tax on every transaction. According to the project’s whitepaper, 5% of the tax was distributed to existing holders, while the other 5% was deposited into “locked” liquidity pools to ensure market stability. However, authorities revealed that the “locked” status was a fabrication. Karony and his co-conspirators retained access to these pools, using complex transaction routing and unhosted wallets to mask the theft of millions of dollars. While publicly denying they traded the token, the defendants frequently sold Safemoon at its peak for personal profit.
Co-conspirator Thomas Smith pleaded guilty to related charges in February 2025 and is awaiting sentencing.
Multi-Agency Investigation and Industry Warning
The investigation involved a coordinated effort by the Federal Bureau of Investigation (FBI), the Internal Revenue Service Criminal Investigation (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 that the scheme exploited the faith of over a million victims, vowing that HSI New York will continue to work tirelessly to ensure those who exploit trust—whether through fiat or crypto—face justice.
The Safemoon case stands as one of the most high-profile crypto frauds in recent years, serving as a stark reminder of the risks in the decentralized finance space. Karony’s sentence reinforces the message that US regulators are intensifying their crackdown on fraudulent actors in the crypto industry, and investors are urged to exercise due diligence and avoid projects with opaque tokenomics and unverified claims.