Former SafeMoon CEO Sentenced to Over Eight Years for Crypto Fraud Scheme

A federal judge in Brooklyn sentenced former SafeMoon CEO, Braden John Karony, to 100 months in prison for misleading and defrauding investor funds from the crypto project’s “locked” liquidity pools.

US District Judge Eric R. Komitee imposed 100 months on the wire-fraud conspiracy count and 60 months on the securities-fraud conspiracy count, to run concurrently. The court set a separate hearing on the money-laundering count for April 23, 2026, at 10 a.m.

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How SafeMoon Started

SafeMoon launched in March 2021 and was promoted as a DeFi token designed to protect buyers from insider selling and “rug pulls.” Prosecutors said Karony and co-conspirators Kyle Nagy and Thomas Smith publicly promised liquidity was locked and touted a 10–12% transaction tax as a mechanism to support holders. 

They said the group retained control behind the scenes, then diverted more than US$200 million (AU$306 million) from the liquidity pools while using wash trading, price manipulation, and pseudonymous wallets and exchanges to move funds.

Prosecutors said Karony personally received about US$9 million (AU$13.7 million) and spent it on luxury purchases, including a US$2.2 million (AU$3.3 million) home in Utah, other property, and multiple vehicles.

Not only did Braden John Karony abuse his position as CEO, but he also betrayed his investors’ trust by stealing more than nine million dollars in digital assets from his company to fund his lavish lifestyle.

FBI Assistant Director in Charge, James Barnacle.

Karony was charged in November 2023 with conspiracy to commit securities fraud, wire-fraud conspiracy, and money laundering, alongside related SEC civil action. A jury convicted him on all counts on May 21, 2025, after a 12-day trial. Prosecutors sought a 12-year sentence; the defense asked for about one year, arguing mitigating factors including his age at the time.

The court also ordered forfeiture of two residential properties and set financial penalties that include roughly US$7.5 million (AU$11.4 million) in forfeiture and another US$7.5 million in restitution, with final figures to be addressed at the April hearing. 

Karony is scheduled to serve three years of supervised release after his prison term. Smith has pleaded guilty and is awaiting sentencing. Nagy remains at large. 

SafeMoon later filed for bankruptcy in Utah after the arrests.

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