SafeMoon Scandal Ends With 8-Year Sentence for Ex-CEO

Former SafeMoon CEO Braden Karony sentenced to 8 years for fraud tied to $9 million in misused liquidity funds.

Braden John Karony, SafeMoon’s former CEO, has been sentenced to 8 years in prison for his role in a multi-million dollar crypto fraud scheme.

U.S. District Judge Eric Komite handed out the judgment in a Brooklyn federal court after a jury convicted him in May 2025 following a three-week trial.

Details of The Sentencing

Court documents show that Karony was found guilty of conspiracy to commit securities fraud, wire fraud, and money laundering. As part of the ruling, he has been ordered to forfeit approximately $7.5 million, while the amount of restitution to victims will be determined at a later date. The jury also issued a verdict instructing the forfeiture of two residential properties.

Meanwhile, one of his co-conspirators, Thomas Smith, pleaded guilty in February 2025 and is awaiting sentencing, while Kyle Nagy remains at large.

“Karony lied to investors from all walks of life—including military veterans and hard-working Americans—and defrauded thousands of victims in order to buy mansions, sports cars, and custom trucks,” said United States Attorney Joseph Nocella, Jr.

FBI Assistant Director in Charge James C. Barnacle said the former executive abused his position and betrayed investors’ trust by stealing more than $9 million in cryptocurrency to finance a lavish lifestyle. The proceeds were used to purchase luxury vehicles and real estate, including a $2.2 million home in Utah, additional homes in Kansas, a $277,000 Audi R8 sports car, a Tesla, a custom Ford F-550, and Jeep Gladiator pickup trucks.

IRS-CI New York Special Agent in Charge Harry T. Chavis added that Karony carried out the scheme by exploiting his access to SafeMoon’s liquidity pool while attempting to conceal the transactions, which law enforcement eventually traced, exposing the scheme.

Liquidity Pool Misrepresentations

SafeMoon tokens were launched in March 2021 by the firm on a public blockchain, with each transaction automatically subject to a 10% tax that was split into two 5% tranches. One was meant to be reflected to holders in proportion to their holdings, increasing their token balances, while the remaining 5% was designated for its pools to boost market liquidity.

You may also like:

In the months following its debut, SafeMoon attracted millions of customers and reached a market capitalization exceeding $8 billion.

Prosecutors claim that Karony and his partners lied about important details of the company, including false statements that its reserves were locked and could not be used for personal reasons, that tokens would only be used for specific business purposes, that digital asset pairs would be added to the liquidity pool manually when trades occurred on certain exchanges, and that the developers were not using or trading SafeMoon for their own gain.

In reality, they retained access to the liquidity pools and diverted millions of dollars’ worth of crypto for personal enrichment.