SafeMoon CEO Braden Karony’s conviction marks the downfall of a once-hyped crypto project. Found guilty of securities fraud, wire fraud, and money laundering, Karony’s actions shattered investor trust, leaving SafeMoon in ruins. This article delves into the crypto fraud scandal that led to a potential 45-year sentence.
A Fraudulent Facade Exposed
Price fluctuation of SafeMoon’s SFM token, screenshot from CoinMarketCap at 03 PM on May 22, 2025.
SafeMoon CEO Karony was convicted on all counts in a U.S. federal court for orchestrating a multimillion-dollar crypto fraud scandal. Prosecutors revealed that SafeMoon, launched in 2021, falsely marketed its token (SFM) as a revolutionary profit-sharing model. A 10% transaction fee—split between redistribution to holders and a “locked” liquidity pool—was touted as ensuring stability. However, the Department of Justice uncovered that Karony and accomplices accessed these funds, siphoning millions for personal gain.
Joseph Nocella, Jr., U.S. Attorney, stated, “SafeMoon was anything but safe, a hollow promise for misled investors.” The SafeMoon executive profited over $9 million, using pseudonymous wallets and unhosted exchange accounts to conceal trades, per court documents. The securities fraud involved buying and selling SFM at peak prices, manipulating the market.
Co-Conspirators’ Fates Diverge
Despite denying SFM holdings, the SafeMoon CEO and associates traded the token for profit. Diverted funds fueled lavish purchases, including luxury properties, an Audi R8, Tesla, and custom trucks. Co-defendant Thomas Smith pleaded guilty and awaits sentencing, while founder Kyle Nagy remains at large, reportedly having fled to Russia. The FBI, IRS, Homeland Security Investigations, and SEC jointly exposed the wire fraud and money laundering scheme.
Online discussions reflect outrage, with investors lamenting losses after SafeMoon’s promises of “safely to the moon.” Some X posts highlight the crypto fraud scandal as a cautionary tale, though a few defend Karony, citing crypto’s regulatory gray areas.
SafeMoon’s Collapse and Rebirth Attempt
The SafeMoon CEO’s actions led to the project’s demise. SafeMoon filed for Chapter 7 bankruptcy in December 2023, acquired by VGX Foundation. Once valued at $8 billion, its market cap now languishes at $7.2 million, with 24-hour trading volume below $1 million, per May 22, 2025, data. In February 2025, SafeMoon pivoted to a Solana-based memecoin, burning most SFM tokens. Lacking a development team, roadmap, or vision, it now operates as a community-driven token, a shadow of its DeFi innovation claims.
Conclusion
SafeMoon CEO Braden Karony’s conviction for securities fraud, wire fraud, and money laundering caps a notorious crypto fraud scandal. Facing up to 45 years in prison, his misuse of “locked” liquidity funds devastated investors. With SafeMoon reduced to a struggling memecoin, the case underscores the need for vigilance in the volatile DeFi innovation space.
