SafeMoon’s Ex-CEO convicted in crypto fraud case

A US federal jury has convicted Braden Karony, former CEO of digital asset company SafeMoon, on all charges in a cryptocurrency fraud case. Prosecutors argued that Karony’s actions resulted in the misappropriation of millions of dollars from investors.

Following a 12-day trial before US District Judge Eric R. Komitee, Korony was convicted of conspiracy to commit securities fraud, wire fraud, and money laundering.  He faces up to 45 years in prison when sentenced.

The jury took only a few hours to reach their decision after a trial that lasted about two weeks, during which Karony insisted he was innocent. 

A jury also ordered the forfeiture of one residential property and the proceeds from the sale of another, amounting to roughly $2 million.

According to prosecutors, the scheme undermined investor confidence in digital assets and contributed to broader concerns about fraud in the crypto market.

“The SafeMoon digital asset was anything but safe and turned out to be pie in the sky for investors who were deliberately misled by Karony, a man who sought to get rich quick by stealing and diverting millions of dollars,” US Attorney Joseph Nocella, Jr. said in a statement.

Jury finds Karony guilty of conspiracy, money laundering, and wire fraud

In the US District Court for the Eastern District of New York, the jury determined that Karony was involved in a conspiracy to defraud the United States, as well as money laundering and wire fraud. Both prosecutors and defense attorneys presented their arguments during the trial that began with jury selection on May 5. 

The criminal trials against the executive of a cryptocurrency company were widely viewed as a bellwether for how Joseph Nocella, the acting US Attorney for the district, would approach cases of digital assets and fraud. Nocella, a Donald Trump nominee, began serving duty this month.

It was, however, unclear when Karony will be back in court for a sentencing hearing. He could spend over 40 years in prison for his role in defrauding and money laundering activities. On the other hand, Smith, who is said to have agreed to a plea deal with prosecutors, stands to get a lighter sentence.

Karony’s trial came after a sentencing hearing for former Celsius CEO Alex Mashinsky in the Southern District of New York; a judge sentenced him to a 12-year prison term following a guilty plea. Former FTX CEO Sam Bankman-Fried was sentenced to 25 years in prison after going to trial, having previously maintained his innocence.

Karony takes to social media to proclaim innocence as trial unfolds

Karony turned to social media to defend himself, claiming he was innocent as his trial for fraud and money laundering charges started in New York. This came after he shared an X post on May 6, likely after the court proceedings had concluded for the day. He declared that he was innocent and did not commit fraud in response to news coverage about his trial. 

The trial, which is expected to last until May 26, has received less media coverage than other crypto cases, like the sentencing of former Binance CEO Changpeng Zhao.

Following Karony’s pleading not guilty to charges of securities fraud conspiracy, wire fraud conspiracy, and money laundering, he had been out on a $3 million bond since February 2024. 

As the public eagerly waits for Karony’s sentencing hearing in court, fear has struck them as this is yet another crypto executive’s involvement in a fraud case. Investors may, therefore, decide to hold back, their investment dragging crypto space development behind.