Former SafeMoon CEO Faces 45 Years in Prison for Crypto Fraud and Money Laundering

The Department of Justice (DOJ) has announced that the former CEO of SafeMoon, Braden John Karony, is facing up to 45 years in federal prison for conspiracy to commit securities fraud, wire fraud, and money laundering. 

According to a federal jury at the federal courthouse in Brooklyn, the SafeMoon executive and his associate allegedly defrauded the company’s investors for personal benefit. Karony misled investors about the firm’s financial state while secretly using investor funds for luxury items.

“Karony used his scheme to purchase multiple homes, sports cars, custom trucks, and other luxury goods. Today’s guilty verdict should serve as a warning to all would-be fraudsters that my Office will vigorously prosecute individuals like the defendant who victimize digital asset investors and undermine investor confidence in digital assets markets, thereby threatening the stability and growth of these emerging technologies,” said U.S. Attorney Nocella. 

Karony Forfeits $2M Residential Property

Furthermore, the report revealed that when SafeMoon’s market capitalization surged to over $8 billion, Karony intentionally diverted the funds. The court document disclosed that the executive will forfeit one residential property and proceeds from the sale of another residential property, which amounts to approximately $2 million. 

The Justice Department noted that Kariny’s decision to exploit his company was based on selfish desires and greed. McCormack, HSI New York Acting Special Agent, stated that the SafeMoon CEO treated multi-million dollars as his personal bank account. As such, he added that Karony will soon forfeit his real estate and luxury vehicles.   

“The defendant will soon be trading his sprawling real estate and luxury vehicles for a jail cell within the four walls of a federal penitentiary. As reflected by today’s conviction, whether it involves fiat or crypto, HSI New York’s El Dorado Task Force will relentlessly pursue individuals intent on exploiting investors and the American financial system for their own gain,” he added. 

SafeMoon’s History

Launched in March 2021, SafeMoon issued its tokens on a public blockchain. The company’s smart contract imposed a 10% tax on all transactions, divided into two 5% portions meant to benefit token holders in designated ways. 

Interestingly, the first 5% of SafeMoon’s transaction tax was to be redistributed to all holders, increasing each investor’s balance proportionally. The remaining 5% of SafeMoon’s transaction tax was allocated to designated liquidity pools intended to increase market liquidity. Following its March 2021 launch, SafeMoon quickly amassed millions of holders and reached a market cap exceeding $8 billion.

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