In a landmark case shaking the cryptocurrency world, Braden John Karony, the former CEO of SafeMoon, was convicted by a federal jury in Brooklyn, New York, on charges of conspiracy to commit securities fraud, wire fraud, and money laundering.
The verdict, delivered on May 24, 2025, marks a significant moment for the crypto industry, highlighting the risks of unchecked financial schemes in the rapidly evolving digital asset space.
Today we’re going over the details of the SafeMoon fraud, its impact on investors, and the broader implications for the cryptocurrency market.
Let’s get started!
The Rise and Fall of SafeMoon
SafeMoon, launched in March 2021, emerged as a meteoric player in the decentralized finance (DeFi) space, promising investors a unique tokenomics model.
The SafeMoon protocol incentivized holding by imposing a 10% transaction fee, with half redistributed to existing holders and the other half added to a liquidity pool.
Marketed as a community-driven project, SafeMoon’s meteoric rise saw its token value skyrocket, fueled by social media hype and endorsements from influencers.
At its peak, SafeMoon boasted a market capitalization exceeding $8 billion, attracting millions of investors worldwide.
However, beneath the surface, cracks began to appear.
Allegations of mismanagement, questionable financial practices, and a lack of transparency plagued the project.
By late 2023, investigations by the U.S. Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) zeroed in on SafeMoon’s leadership, culminating in charges against Karony, former CTO Thomas Smith, and founder Kyle Nagy.
The Fraud Scheme Unraveled
The 18-month investigation revealed a sophisticated scheme orchestrated by SafeMoon’s leadership to defraud investors of over $200 million.
Prosecutors alleged that Karony and his co-conspirators misrepresented the safety and accessibility of SafeMoon’s liquidity pool, claiming funds were locked and could only be accessed in extreme circumstances.
In reality, court documents show that Karony and others siphoned millions for personal use, including luxury purchases, real estate, and speculative investments.
Thomas Smith, SafeMoon’s former CTO, played a pivotal role in exposing the fraud.
Accepting a plea bargain in February 2025, Smith testified that the team engaged in “intentional dishonesty,” manipulating liquidity pools and misrepresenting the project’s financial health to inflate token prices.
His guilty plea corroborated earlier reports from crypto analysts, such as those from @coffeebreak_YT, who had raised red flags about SafeMoon’s operations as early as 2022.
The SEC further charged SafeMoon with operating as an unregistered securities offering, a claim bolstered by the project’s aggressive marketing and promise of passive income through tokenomics.
The DOJ’s indictment painted a picture of a calculated effort to exploit retail investors, many of whom were drawn to SafeMoon’s promise of financial freedom during the 2021 crypto bull run.
The Trial and Conviction
Karony’s trial, which began in early 2025, captivated the crypto community.
Prosecutors presented damning evidence, including financial records, internal communications, and whistleblower testimony.
The jury found Karony guilty on all counts, with potential penalties of up to 45 years in prison—a stark warning to other crypto executives.
Kyle Nagy, SafeMoon’s founder, remains at large, reportedly having fled the country.
Meanwhile, Karony maintained his innocence throughout the trial, with supporters like @safemoon_knight claiming he was unfairly targeted.
However, the overwhelming evidence, including Smith’s testimony and blockchain transaction records, left little room for doubt.
Impact on Investors and the Crypto Market
The SafeMoon scandal has left thousands of investors reeling, with many losing significant portions of their savings.
The token’s value has plummeted over 90% from its all-time high, rendering it nearly worthless.
Social media platforms, particularly X, have been abuzz with reactions, ranging from vindication among critics to despair among loyal “SafeMoon Army” members.
Posts on X highlight the emotional toll, with users like @coffeebreak_YT noting the vindication of years-long efforts to expose the fraud.
The case underscores broader issues in the crypto industry, including the lack of regulatory oversight and the vulnerability of retail investors to hype-driven projects.
SafeMoon’s collapse joins a growing list of high-profile crypto frauds, including FTX and MoviePass, signaling the need for stronger protections.
What’s Next for SafeMoon and the Crypto Industry?
As Karony awaits sentencing, the fallout from SafeMoon’s collapse continues to ripple.
Investors are pursuing class-action lawsuits, seeking to recover losses, while regulators are intensifying scrutiny of DeFi projects.
The SEC’s involvement in the case signals a broader push to classify certain cryptocurrencies as securities, potentially reshaping the legal landscape for token issuers.
For the crypto industry, the SafeMoon saga serves as a cautionary tale.
Experts urge investors to conduct thorough due diligence, emphasizing the importance of transparent leadership, audited smart contracts, and regulatory compliance.
Blockchain analytics firms are also stepping up, offering tools to track suspicious transactions and prevent similar schemes.
How to Stay Informed on SafeMoon News
The SafeMoon case remains a developing story, with ongoing investigations into other team members and related entities.
To stay updated, follow reputable crypto news outlets and monitor platforms like X for real-time sentiment.
However, beware of misinformation—always verify claims against primary sources like court documents or official SEC statements.
For those affected by the SafeMoon collapse, resources are available through investor advocacy groups and legal firms specializing in crypto fraud.
The road to recovery may be long, but the conviction of Braden John Karony marks a step toward accountability in the Wild West of cryptocurrency.
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About The Author
Complete criminal!
Thanks for reading the article! The SafeMoon case raises critical questions about accountability in the crypto space. With so many retail investors affected, what measures do you think should be implemented to prevent similar frauds in the future? Let’s discuss how we can push for better regulations and transparency in the industry!