Former SafeMoon CEO Braden John Karony has been convicted by a federal jury on multiple charges over his involvement in a cryptocurrency fraud scheme that resulted in the theft of millions from investors, under the guise of providing a secure decentralized finance (DeFi) offering. Found guilty of conspiracy to commit securities fraud, wire fraud, and money laundering after a detailed 12-day trial in Brooklyn on May 21, Karony could face up to 45 years in prison. The jury also mandated the forfeiture of around $2 million in real estate assets tied to the fraudulent activities, with his sentencing set for later this year.
Co-conspirator Thomas Smith has already entered a guilty plea and is awaiting sentencing, while the third accused, Kyle Nagy, is still at large. Following these events, the SafeMoon project has been taken over by its community and has pivoted towards a memecoin strategy.
### A Scheme of Deception
Launched in March 2021, SafeMoon was marketed by Karony and his associates as a secure DeFi token featuring a self-sustaining liquidity mechanism. They promised investors that a 10% tax on transactions would benefit holders and ensure liquidity by funding locked pools. However, in reality, Karony had unrestricted access to these pools and redirected millions into his personal accounts. The ill-gotten funds were used to acquire lavish homes, luxury cars, and other expensive items.
US Attorney Joseph Nocella described Karony’s operation as a “pipeline for theft,” emphasizing the exploitation of investor funds to support his opulent lifestyle. Law enforcement agencies, including the IRS-Criminal Investigation, FBI, and Homeland Security Investigations, traced the stolen assets through various anonymous wallets and centralized exchange accounts, exposing the fraud.
### Tracing the Crypto Deception
The IRS-CI, alongside its cyber and J5 task forces, meticulously followed the digital breadcrumbs to unveil how Karony laundered the stolen funds. Cooperation with international enforcement bodies from Australia, Canada, the Netherlands, and the UK helped dismantle the complex cross-border operation. Efforts by the FBI and HSI revealed that Karony also secretly traded SafeMoon at peak prices for personal gain, further defrauding investors while publicly denying any insider manipulation.
This case highlights the vigilant efforts of authorities to combat crypto-related fraud and protect investors from deceptive practices in the rapidly evolving digital currency landscape.
Tweet this: Former #SafeMoon CEO Braden Karony faces up to 45 years in prison after a jury convicted him of leading a major crypto fraud scheme, siphoning millions from investors. #CryptoFraud #DeFi #CryptocurrencyNews
