Executive Summary
In a dramatic climax to one of the crypto world’s most audacious frauds, Braden John Karony, the former CEO of SafeMoon, was convicted on all charges in a New York federal court. Karony now stands as the latest poster child for the dark side of decentralized finance, found guilty of conspiracy to commit securities fraud, wire fraud, and money laundering in a $2 billion scheme that left investors reeling and regulators scrambling to restore faith in digital assets.
The SafeMoon Saga: From “To the Moon” to Crash Landing
SafeMoon, launched in March 2021, promised investors astronomical returns and “locked” liquidity pools that would supposedly safeguard their funds from insider theft. In reality, these claims were a smokescreen. Karony and his co-conspirators, including CTO Thomas Smith and founder Kyle Nagy, retained full access to the liquidity pools, siphoning off tens of millions of dollars for their personal enrichment.
The Fraud Unveiled
- False Promises: SafeMoon’s leadership repeatedly assured the public that liquidity pools were locked and inaccessible, a claim that was central to their marketing and investor trust.
- Brazen Theft: Contrary to these assurances, Karony and his team diverted millions from these pools, channeling funds through complex crypto transactions and shell accounts to mask their tracks.
- Luxury Lifestyles: The stolen funds financed a lavish lifestyle—Karony purchased multi-million-dollar homes, sports cars, custom trucks, and other luxury goods, all while SafeMoon investors watched their tokens plummet in value.
- Market Manipulation: Executives also engaged in market manipulation, including “wash trading” to create the illusion of legitimate activity and price stability.
The Trial: Betrayal and Justice
The trial, which began in early May 2025, was a spectacle of betrayal and high drama. Thomas Smith, SafeMoon’s former CTO, turned government witness, delivering damning testimony that sealed Karony’s fate. Smith admitted to his role in the scheme and described how the SafeMoon leadership coordinated to deceive the public and conceal their thefts.
Meanwhile, Kyle Nagy, the project’s creator, fled to Russia and remains at large—a fugitive from justice as the crypto world watches in disbelief.
The Verdict and Fallout
After less than a day of deliberation, the jury returned a unanimous guilty verdict on all counts. Karony now faces a potential prison sentence of up to 45 years. The court also ordered the forfeiture of nearly $2 million in real estate proceeds, with prosecutors moving to detain Karony as a flight risk due to his international connections and millions in unaccounted digital assets.
Context: A Symbol of Crypto’s Wild West
Karony’s conviction is the latest in a string of high-profile crypto frauds, following the downfall of Celsius CEO Alex Mashinsky and FTX’s Sam Bankman-Fried. The SafeMoon case is a stark reminder that, despite the promise of decentralized finance, the sector remains rife with risk, deception, and criminality.
“While the name of his company is SafeMoon, there was nothing safe about this investment that was just a front for theft.”
— IRS-CI New York Special Agent in Charge Harry Chavis
Conclusion
The SafeMoon scandal is a cautionary tale for regulators, investors, and the entire digital asset industry. Braden John Karony’s conviction exposes the rot at the heart of crypto’s get-rich-quick culture and signals that, even in the Wild West of blockchain, the law is closing in.
