Criminal Conviction of SafeMoon's Ex-CEO: Cryptocurrency Fraud and Money Laundering
Former SafeMoon CEO Convicted of Fraud and Money Laundering
On May 21, 2025, Braden John Karony, the former CEO of the cryptocurrency company SafeMoon, was found guilty by a federal jury in New York on charges of conspiracy, wire fraud, and money laundering. The deliberation followed a two-week trial that began with jury selection on May 5, 2025, in the US District Court for the Eastern District of New York.
SafeMoon, a cryptocurrency token launched in 2021, once boasted a market cap exceeding $8 billion. The token employed a 10% transaction tax on transfers, with half intended to be redistributed to token holders, and the remainder to be locked in a liquidity pool to support trading. However, the prosecution claimed that Karony, in cahoots with his co-conspirators, retained access to this liquidity pool. The funds were then allegedly diverted for personal use while publicly asserting that they did not hold or trade SafeMoon tokens.
The allegations against Karony involved the misappropriation of millions of dollars from investor funds. Court documents revealed that, as part of the scheme, Karony had personally obtained over $9 million in crypto assets. The concealed funds were used to purchase luxury properties, vehicles, and custom trucks.
To deceive authorities, Karony reportedly disguised his trading activity and the use of investor funds through a series of pseudonymous wallets and unhosted accounts on centralized exchanges. This deception allowed him to profit during peak prices while ordinary investors sustained losses.
Thomas Smith, the former chief technology officer of SafeMoon, testified against Karony following his guilty plea. Smith is currently awaiting sentencing, possibly receiving a lighter sentence due to his cooperation. The whereabouts of Kyle Nagy, the platform's creator and another co-defendant, remain unknown after he reportedly fled to Russia.
The investigation into the case was conducted by the FBI, IRS Criminal Investigation, Homeland Security Investigations, and the US Securities and Exchange Commission. The trial signified a significant test for how fraud cases involving digital assets would be handled in the U.S., particularly under the interim U.S. Attorney Joseph Nocella.
A sentencing date for Karony has not been announced, and the specific penalties will depend on the court's decision. The trial marks a broader trend of high-profile cryptocurrency executives facing criminal charges, including former Celsius CEO Alex Mashinsky and former FTX CEO Sam Bankman-Fried.
In the wake of the conviction, the technology sector, specifically cryptocurrency, is under increased scrutiny, with general-news outlets reporting on the crime-and-justice implications of the case. The former CEO of SafeMoon, Braden John Karony, was found guilty of fraud and money laundering, with allegations of misappropriated investor funds and lavish purchases using cryptocurrency assets.
