CEO of Digital Asset Company SafeMoon Sentenced to 100 Months in Prison for Multi-Million Dollar Crypto-Fraud Scheme

Braden John Karony Stole Millions of Dollars of Investor Assets to Fund Lavish Lifestyle Earlier today, in federal court in Brooklyn, Braden John Karony, the Chief Executive Officer of SafeMoon US LLC, a digital asset company registered in Utah (SafeMoon) was sentenced by United States District Judge Eric Komitee to 100 months in prison for conspiracy to commit securities fraud, wire fraud, and money laundering in connection with a scheme to defraud investors in a decentralized finance digital asset called “SafeMoon.” As part of the sentence, Karony was ordered to forfeit approximately $7.5 million. The amount of restitution to the victims will be determined at a later date. Karony was convicted by a federal jury following a three-week trial in May 2025. The jury also issued a verdict to forfeit two residential properties. SafeMoon tokens were digital assets first issued in March 2021 by SafeMoon LLC on a public blockchain. Through the operation of SafeMoon’s smart contract, every transaction in SafeMoon was automatically subject to a 10% tax, meaning that if a holder of SafeMoon transferred 10 SafeMoon to another user, 1 SafeMoon would automatically be retained from the transfer as a tax and the remaining 9 SafeMoon would be received by the other party. As marketed to SafeMoon investors, the proceeds of SafeMoon’s 10% tax were split into two 5% tranches, the proceeds of which were supposed to benefit holders of SafeMoon in specific ways. The first 5% tranche of the tax proceeds was supposed to be “reflected” back to, and distributed among, all SafeMoon holders in proportion to their current SafeMoon holdings and thereby increase the total quantity of SafeMoon held by every SafeMoon investor automatically. The remaining 5% tranche of SafeMoon tax proceeds was supposed to be deposited into designated SafeMoon “liquidity pools.” The larger the SafeMoon liquidity pool, the greater the liquidity in the market for SafeMoon. In the months after its launch in March 2021, SafeMoon grew to have millions of holders and a market capitalization of more than $8 billion. The Defendants’ Fraudulent Scheme Karony and his co-conspirators misrepresented various material aspects of the SafeMoon offering to investors. Such misrepresentations included that SafeMoon relied on “locked” liquidity pools that would automatically increase in size due to the 10% tax imposed on every SafeMoon transaction; that the “locked” SafeMoon liquidity pool prevented the defendants and other insiders at SafeMoon from being able to “rug pull” (a type of crypto fraud) SafeMoon investors by removing liquidity from the SafeMoon liquidity pool; that tokens in the liquidity pool would only be used for limited pre-defined business purposes, not personal enrichment; that the defendants would manually add token pairs to the SafeMoon liquidity pool when transactions of SafeMoon occurred on specific centralized exchanges; and that the developers were not and had not been holding and trading SafeMoon for their benefit. In reality, Karony and his co-conspirators retained access to the SafeMoon liquidity pools and used that access to intentionally divert and misappropriate millions of dollars’ worth of tokens for their personal benefit. In addition, although they publicly denied that they personally held or traded SafeMoon, they repeatedly bought and sold SafeMoon, sometimes at the height of the SafeMoon market price, which generated millions of dollars in profits. Karony and his co-conspirators masked their movement of the fraudulent proceeds via numerous private un-hosted crypto wallet addresses, complex transaction routing, and pseudonymous centralized exchange accounts. Karony acquired over $9 million in crypto assets from the scheme and used some of the proceeds to purchase luxury vehicles and real estate, including a $2.2 million home in Utah, additional homes in Utah and Kansas, a $277,000 Audi R8 sports car, another Audi R8, a Tesla, and custom Ford F-550 and Jeep Gladiator pickup trucks. Co-conspirator Thomas Smith pleaded guilty in February 2025 to conspiracy to commit securities fraud and wire fraud and is awaiting sentencing. Co-conspirator Kyle Nagy remains at large.