Braden John Karony, the CEO of the cryptocurrency and blockchain firm SafeMoon, has been found guilty on all counts in a three-count indictment concerning securities fraud, wire fraud, and money laundering. The verdict was announced today at a federal courthouse in Brooklyn, concluding a trial that lasted 12 days.
### Karony Found Guilty In SafeMoon Scandal
The charges against Karony arose from allegations that he misled investors regarding SafeMoon, a decentralized finance (DeFi) digital asset launched by his company, SafeMoon LLC. Prosecutors claim that Karony and his associates deceived investors about their access to the liquidity pool and whether the funds were being utilized for personal gain. During a period when SafeMoon’s market capitalization surpassed $8 billion, Karony reportedly misappropriated millions from the liquidity pool for his own benefit. Following his conviction, he could face a prison sentence of up to 45 years. Additionally, the jury mandated the forfeiture of one residential property and the proceeds from another, amounting to roughly $2 million. U.S. Attorney Joseph Nocella, Jr. denounced Karony’s actions, stating, “The SafeMoon digital asset was anything but safe and turned out to be pie in the sky for investors who were deliberately misled.” Nocella emphasized that Karony used the stolen funds to sustain a luxurious lifestyle that included multiple homes and high-end vehicles.
### Fraudulent Practices Of CEO Braden Karony
The investigation was a joint effort involving various agencies, including the FBI and the IRS. FBI Assistant Director Christopher G. Raia commented, “Karony violated his clients’ trust and wallets while attempting to conceal his misconduct through discrete transactions.” IRS Special Agent in Charge Harry T. Chavis, Jr. underscored the necessity of tracking cryptocurrency transactions to hold offenders accountable, stating, “The name of his company is SafeMoon, but there was nothing safe about this investment.” SafeMoon tokens, which were first launched in March 2021, operated on a public blockchain and imposed a 10% tax on each transaction. This tax was intended to benefit both token holders and the liquidity pool, with half of it returned to holders and the other half deposited into liquidity reserves. Initially, SafeMoon attracted a vast number of investors, boasting a market cap exceeding $8 billion. Prosecutors elaborated on how Karony and his team misrepresented critical elements of the SafeMoon offering, falsely asserting that liquidity pools were “locked” to prevent insider fraud and that tokens would only be allocated for legitimate business purposes. In truth, they retained access to these pools, diverting millions for personal use while publicly denying any private trading of SafeMoon. Karony’s fraudulent activities included utilizing multiple cryptocurrency wallets and intricate transaction pathways to disguise the movement of the embezzled funds. Reports indicate that he generated over $9 million from the scam, using the proceeds to finance extravagant expenditures, including a $2.2 million residence and luxury vehicles such as Audi R8 sports cars and customized trucks. The overall cryptocurrency market cap was recorded at $3.38 trillion.
