Braden John Karony, the former chief executive of defunct crypto platform SafeMoon, has been sentenced to 100 months in federal prison for his role in a sweeping fraud scheme that misled investors and siphoned millions from what was once touted as a revolutionary token.

The sentence was handed down on Feb. 10 by US District Judge Eric R. Komitee in Brooklyn. 

Karony was convicted in May last year following a jury trial in the Eastern District of New York, where he was found guilty of conspiracy to commit securities fraud, wire fraud, and money laundering.

Court records show Karony’s total offence level was calculated at 37, placing him in criminal history category I. 

The advisory sentencing guidelines called for a term between 210 and 262 months.

While the ultimate sentence of 100 months fell below that range, the judge left no doubt about the gravity of the conduct involved.

During the hearing, victims addressed the court and recounted the personal toll of the SafeMoon collapse, which had left many financially ruined. 

Karony’s defence attorneys attempted to soften the outcome by referencing his age at the time of the offence—just 25 years old—and pointed to his upbringing in an effort to elicit sympathy.

But Judge Komitee, after a brief recess, returned with a pointed rebuke of the scheme.

Calling the conduct a “massive fraud,” the judge remarked that the defendants had gone to extraordinary lengths to build investor trust, all while engineering what amounted to a covert theft. 

“It’s more akin to theft than fraud,” Komittee said, noting that individual victims had suffered significant losses rather than small incremental damages.

Karony was sentenced to 100 months in the custody of the Attorney General, with 60 months on the first count and 100 months on the second, to be served concurrently.

A separate sentencing on the third count, money laundering, is scheduled for April 23.

The core of the scheme revolved around misrepresentations tied to SafeMoon’s 10% transaction tax and so-called “locked” liquidity pools. 

Karony and his co-conspirators claimed the mechanism was designed to protect holders from a rug pull, an insider-driven liquidity drain that crashes a token’s value. 

They asserted that funds in the liquidity pool could not be touched by insiders and would instead support the token’s market health.

Karony and his associates retained direct access to the liquidity pool and used it as a personal slush fund. 

They routinely transferred funds out of it while continuing to assure the public that it was secure.

Despite public denials, the defendants also held and actively traded SafeMoon tokens, at times during peak market valuations, booking millions in profits.

To hide the trail, they relied on unhosted wallets, pseudonymous accounts on centralised exchanges, and complex routing patterns to obscure the origins and destinations of the funds.

The US government’s tracing teams, however, ultimately unravelled the scheme.

Karony personally amassed more than $9 million through the fraud, according to court filings. 

Some of the misappropriated crypto was used to finance an extravagant lifestyle, including the purchase of a $2.2 million mansion in Utah, homes in Kansas and elsewhere in Utah, two Audi R8 sports cars, including one worth $277,000, a Tesla, and customised Ford and Jeep pickup trucks.

His co-defendant, Thomas Smith, SafeMoon’s former chief technology officer, pleaded guilty in February 2025 to related charges and cooperated with prosecutors. He is currently awaiting sentencing. 

The third key figure in the case, Kyle Nagy, SafeMoon’s original creator, remains a fugitive, with unconfirmed reports suggesting he may have fled to Russia.

At its peak in 2021, SafeMoon boasted a market capitalisation exceeding $8 billion, propelled by hype and aggressive marketing. 

But after the fraud came to light and the company filed for bankruptcy in 2023, the token’s value collapsed by more than 98%, leaving over a million investors in the lurch.

The post SafeMoon CEO Braden Karony gets 100-month term for $9M investor fraud appeared first on Invezz

Bitcoin price in Telegram @btc_price_every_hour

1 +