Former SafeMoon CEO Braden John Karony Found Guilty in $2B Crypto Fraud

In a significant development amid growing scrutiny over the crypto industry, a New York judge found former SafeMoon CEO Braden Karony guilty of a $2 billion crypto fraud. The jury convicted Karony of multiple felony charges, including conspiracy, wire fraud, and money laundering.

Reportedly, the ex-SafeMoon CEO has defrauded customers and used the funds for personal benefits. Although the sentencing date is pending, Karony potentially faces up to 45 years in prison.

SafeMoon Scandal: Ex-CEO Convicted of Massive Fraud Scheme

According to the Department of Justice, Braden Karony, the former CEO of the blockchain firm SafeMoon, was identified responsible for a $2 billion crypto fraud scheme. The US District Court for the Eastern District of New York stated,

As proven at trial, 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. Karony used his scheme to purchase multiple homes, sports cars, custom trucks, and other luxury goods.

This development significantly highlights the inherent risks in the crypto space. Recently, the Australian authorities shut down more than 90 platforms allegedly related to crypto scams and fruad.

Braden Karony and Co-Defendants Defrauded Customers

As reported by the court, Karony and his co-defendants defrauded SafeMoon clients and stole their money. As per a 2023 lawsuit, these three were charged of the crypto fraud scheme which allegedly “diverted and misappropriated millions of dollars.”

They drained the funds in liquidity pools, which they claimed to have locked. FBI Assistant Director in Charge Raia, stated, “Braden Karony, the CEO of SafeMoon, exploited his company’s digital portfolio with fictional success stories and stole millions of dollars in crypto-assets to finance luxury purchases.”

Though Karony dismissed the claims against him, his associate, former chief technology officer Thomas Smith admitted guilt and testified against him. Meanwhile, another partners, Kyle Nagy reportedly fled to Russia.

It is noteworthy that Karony’s trial came on the heels of former Celsius CEO Alex Mashinsky’s court hearing. During the hearing, the judge ordered a 12-year sentence for Mashinsky.

Where Did the Fund Go?

According to the Department of Justice, the former SafeMoon CEO used this stolen money to buy expensive products and properties. In detail, Karony purchased a $2.2 million house in Utah, fancy cars like Audi R8 and Tesla, and custom trucks. IRS-CI New York Special Agent in Charge Chavis noted,

Braden Karony misled investors; intentionally diverted and misappropriated millions in cryptocurrency for his personal benefit; and lined the driveways of his million dollar homes with luxury cars.  While the name of his company is SafeMoon, there was nothing safe about this investment that was just a front for theft.

SafeMoon Price Dips 10%: What’s Next?

According to data on CoinMarketCap, the SafeMoon token (SFM) plunged by 10% in a single day following the court trial. As of press time, SFM is priced at $0.00001749, down by 20% in a week and 50% in a month.

Despite this overacrching negative trend, the 24-hour trading volume of the token is still in green, showcasing investors’ confidence. The volume is currently at $427.14K, up by 10%. Thought SFM is currntly in the red zone, the positive sentiment surrounding its signals its potential uptrend.