SafeMoon CEO Braden Karony Found Guilty in Massive Cryptocurrency Fraud Scheme
Braden John Karony, the CEO of SafeMoon, has been convicted of orchestrating a multi-million-dollar crypto fraud scheme that misled investors and abused trust in the decentralized finance (DeFi) sector. The conviction, delivered by a federal jury in the Eastern District of New York in May 2025, marks one of the most significant legal reckonings in recent crypto history.
SafeMoon, launched in March 2021, was presented as an innovative DeFi token with tokenomics designed to reward holders. Every transaction incurred a 10% fee—5% was redistributed to existing holders and the other 5% was allocated to liquidity pools intended to stabilize the market. Within months, the project attracted millions of users and reached a market capitalization of over $8 billion, fueled by viral marketing, social media hype, and high-profile endorsements.
However, behind the scenes, Karony and his associates were secretly siphoning millions of dollars from these funds for personal use.
Details of the Conviction
According to the U.S. Department of Justice (DOJ), Karony was convicted on multiple counts, including securities fraud, wire fraud, and money laundering. The DOJ press release states:
“Karony and others misrepresented the nature of SafeMoon’s operations, falsely claiming that liquidity pool funds were ‘locked’ and inaccessible to insiders. In truth, Karony retained access to these funds and misappropriated more than $9 million for personal use.”
— DOJ Press Release, May 2025
Lavish Spending and Hidden Wallets
The court presented evidence showing that Karony used misappropriated funds to purchase luxury assets, including:
- A Tesla Model S
- An Audi R8
- Multiple customized trucks
- A $1.5 million home in Utah
- Renovations and furnishings using investor funds
He also created multiple fake crypto wallets to obfuscate fund flows and maintain the illusion that the liquidity pools were untouched. According to court documents, he and his accomplices used mixing services and privacy wallets to launder the funds, further complicating tracing efforts.
A Landmark Trial in Crypto Enforcement
The trial lasted 12 days and involved expert testimonies from blockchain analysts, forensic accountants, and cybersecurity professionals. One DOJ official remarked:
“This case underscores our commitment to rooting out fraud in the crypto sector. Deceiving retail investors with false promises of transparency and ‘locked’ funds is unacceptable.”
— Damian Williams, U.S. Attorney for the Eastern District of New York
Karony was ordered to forfeit assets totaling over $2 million, including the Utah property and proceeds from the sale of another luxury residence. He now faces up to 45 years in prison, with sentencing scheduled for late 2025.
How SafeMoon Was Supposed to Work
SafeMoon’s original design leveraged automated mechanisms:
- 10% Transaction Fee: Split between token holders and liquidity.
- Redistribution: 5% reflected to all holders, increasing their share passively.
- Liquidity Addition: The remaining 5% went to PancakeSwap (a DEX on Binance Smart Chain) to support smoother trading.
This mechanism aimed to incentivize holding and reduce volatility, but instead became a tool for fraud once Karony retained secret access to supposedly locked liquidity.
Investor Reactions and Broader Implications
The SafeMoon scandal has triggered renewed calls for regulatory oversight in the crypto sector. Many investors, especially those who bought during the 2021 bull run, lost significant funds. Class-action lawsuits are already being prepared by law firms representing affected retail investors.
A former investor posted on Reddit:
“SafeMoon gave me hope as a retail investor. I trusted the process. It turns out we were just liquidity for someone’s luxury lifestyle.”
SEC Chair Gary Gensler also weighed in during a May 2025 briefing:
“Cases like SafeMoon highlight the urgent need for clear disclosures and safeguards in crypto investments. If it walks and talks like a security, we will treat it as one.”
Final Thoughts
The fall of SafeMoon and the conviction of its CEO send a clear message: transparency, decentralization, and investor protection must be foundational pillars in any blockchain project. As regulators sharpen their focus and blockchain forensics improve, the era of untraceable crypto fraud is closing.
