2025-05-26
In November 2023, the U.S. Securities and Exchange Commission (SEC) and the Department of Justice charged SafeMoon and its executives with fraud, unregistered securities offerings, and money laundering, alleging that the leadership misappropriated millions from supposedly "locked" liquidity for personal gain.
The SEC and prosecutors alleged 3 Safemoon's executives siphoned off more than $200 million from SFM and used investor
funds for personal use to buy luxury vehicles and real estate.
SafeMoon CEO, Braden Karony, found guilty of fraud and money laundering. Braden John Karony, the former CEO of SafeMoon, has been convicted on all counts in a famous cryptocurrency fraud case.
On May 21, 2025, a federal jury in the US District Court
for the Eastern District of New York (Brooklyn) found him guilty of conspiracy
to commit securities fraud, wire fraud, and money laundering. Karony now faces
a maximum sentence of 45 years in prison, with sentencing scheduled for later
this year.
Karony and his
associates falsely claimed that SafeMoon's liquidity pools were
"locked" and inaccessible, while they secretly withdrew millions of
dollars for personal use.
Launched in
2021, SafeMoon was promoted as a decentralized finance token with a 10%
transaction fee, half of which was purportedly locked to ensure liquidity.
Contrary to
these claims, Karony and his co-conspirators accessed these funds, channeling
them into personal purchases, including luxury vehicles and real estate. The
diverted funds were also laundered through a network of pseudonymous wallets
and international exchanges .
Investor funds were used to purchase luxury items, including high-end vehicles like an Audi R8 and a Tesla, as well as multimillion-dollar real estate in Utah.
Thomas Smith,
SafeMoon's former CTO, pleaded guilty and testified against Karony, revealing
coordinated efforts to deceive investors. Another co-founder, Kyle Nagy,
remains at large and is reportedly in Russia.
The court has
ordered the forfeiture of at least $2 million in assets linked to the
fraudulent activities, including residential properties.
Following the conviction, SafeMoon's
token (SFM) experienced a decline, dropping 11% to $0.0000176, marking a 99.7%
decrease from its peak three years ago.
The company, once valued at over $8 billion, filed for Chapter 7 bankruptcy in December 2023 and was subsequently acquired by the VGX Foundation.
SafeMoon US, LLC filed for Chapter 7
bankruptcy in December 2023, initiating a liquidation process administered by
the U.S. Bankruptcy Court for the District of Utah.
During this process, the VGX Foundation
acquired most of SafeMoon’s technology and assets, including its popular wallet
and related applications. The VGX Foundation has since taken steps to
revive the project, planning to swap old SafeMoon tokens for a new version on
the Solana blockchain and aiming to restore liquidity and trust within the
community.
