Crypto Hype Turns Sour As SafeMoon CEO Braden Karony Convicted Of Multi-Million Dollar Fraud
Braden John Karony, who once led digital asset firm SafeMoon as CEO, has been found guilty by a federal jury on multiple felony charges.
After a trial lasting nearly two weeks in Brooklyn federal court, the jury convicted Karony of conspiracy to commit securities fraud, wire fraud, and money laundering.
The verdict came swiftly, with deliberations lasting only a few hours.
From Influencer-Fuelled Fame To Fraud Charges
SafeMoon launched in early 2021, gaining traction among retail investors and influencers with bold claims of security and transparency.
It promised a unique transaction tax structure: 10% on transfers, half to be distributed to holders, and the other half supposedly locked in a liquidity pool.
But the reality was starkly different, federal prosecutors argued.
According to court documents, Karony and two other key figures—former CTO Thomas Smith and SafeMoon creator Kyle Nagy—secretly retained access to those locked funds.
Prosecutors told the court that instead of supporting liquidity, the trio siphoned off millions for personal luxuries, including real estate and high-end vehicles.
Acting US Attorney Joseph Nocella Jr. said,
“The SafeMoon digital asset was anything but safe and turned out to be pie in the sky for investors who were deliberately misled by Karony, a man who sought to get rich quick by stealing and diverting millions of dollars.”
Jury Reaches Swift Verdict After Two Weeks Of Evidence
Jurors in the Eastern District of New York returned a guilty verdict on 21 May after just a few hours of deliberation.
The trial, overseen by US District Judge Eric R. Komitee, began on 5 May and ran for 12 days.
Karony, who had pleaded not guilty, now faces up to 45 years in prison.
During proceedings, the jury was presented with internal communications, transaction records, and promotional materials prosecutors said were intentionally misleading.
A key turning point came when former CTO Thomas Smith testified for the prosecution, having accepted a plea deal.
Nagy, reportedly in Russia, remains outside US custody.
The jury also ordered the forfeiture of roughly $2 million, including proceeds from a residential property.
SafeMoon’s Collapse Adds To Broader Crypto Trust Crisis
The verdict lands at a time when trust in digital assets remains fragile.
Like other crypto firms now under legal scrutiny, SafeMoon relied on strong online branding and community marketing to attract investors—many of whom were unaware of the inner workings behind the flashy slogans.
Karony, who had been out on a $3 million bond since February 2024, repeatedly proclaimed his innocence.
Earlier this month, he made multiple posts on X (formerly Twitter) with the sentence,
“I am innocent and did not commit fraud.”
Legal experts warned such public statements during trial could backfire, especially when most defendants typically remain silent under counsel’s advice.
Defence Points To Knowledge Gaps, Disputes Conspiracy Claims
Karony’s defence attorney, Nicholas Smith, tried to argue that Karony was not involved in some of the original misleading materials, pointing to the fact that SafeMoon’s whitepaper and early messaging were crafted by Nagy before Karony joined as CEO.
He also contended that disagreements within the team showed a lack of cohesive conspiracy.
Smith told the jury,
“Conspiracy requires agreement.”
He further argued that Karony’s apparent lack of technical understanding about crypto at the time of some of his statements showed there was no clear intent to defraud.
“Fraud isn’t just about intent, it’s about a level of knowledge.”
Some of the defence’s claims stretched into technical territory, such as suggesting that blockchain explorer links buried in promotional posts gave investors access to the truth about the liquidity pool status.
Smith also insisted that phrases like “SafeMoon is safe” amounted to harmless marketing puffery rather than fraudulent misrepresentation.
Prosecution Frames Case As Signal Of Future Enforcement
This high-profile conviction is being seen as a key moment for Acting US Attorney Joseph Nocella Jr., who stepped into the role at the start of the trial.
A nominee of Donald Trump, Nocella is expected to take a firmer approach to crypto-related crimes.
The SafeMoon case followed the convictions of other high-profile crypto executives, including FTX’s Sam Bankman-Fried, who received 25 years, and Celsius’s Alex Mashinsky, sentenced to 12 years.
Karony’s sentencing date has yet to be announced.
Public reaction on social media has been a mix of vindication and concern.
Many retail investors now question the legitimacy of tokens promoted during the 2021 boom, while others worry that increased regulation may stifle innovation.
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