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Braden John Karony got hammered. The former SafeMoon CEO just received an eight-year prison sentence from U.S. District Judge Eric Komite in Brooklyn federal court after getting convicted for running a massive crypto fraud operation that bilked investors out of millions.
The May 2025 jury verdict came after a brutal three-week trial where prosecutors laid out how Karony and his crew basically turned SafeMoon into their personal piggy bank. Karony got nailed on conspiracy to commit securities fraud, wire fraud, and money laundering charges, according to court documents that paint a pretty damning picture of the whole operation. He’s got to forfeit around $7.5 million, plus two residential properties, with victim restitution still being figured out by the court. His buddy Thomas Smith already pleaded guilty back in February 2025 and he’s waiting for his own sentencing, while Kyle Nagy remains on the run somewhere.
Not your typical white-collar case.
U.S. Attorney Joseph Nocella Jr. didn’t mince words when he said Karony targeted everyone from regular folks to military veterans to bankroll his fancy lifestyle. FBI Assistant Director James C. Barnacle broke down how Karony blew through over $9 million in cryptocurrency on ridiculous purchases – we’re talking a $2.2 million Utah mansion, properties in Kansas, an Audi R8, a Tesla, and custom trucks that probably cost more than most people’s houses. The guy was living large while investors got crushed.
IRS-CI New York Special Agent Harry T. Chavis said Karony basically raided SafeMoon’s liquidity pool like it was his personal ATM. Law enforcement eventually caught up with the scheme, but not before serious damage got done.
SafeMoon launched in March 2021 with this wild 10% transaction tax that was supposed to reward holders and boost liquidity. The token went absolutely nuts, attracting millions of users and hitting a market cap north of $8 billion at its peak. But prosecutors say Karony and his team fed investors a bunch of lies about how the reserves were locked up tight and couldn’t be touched for personal use.
They claimed the tokens only served business functions and that liquidity pools had strict oversight. Total garbage. Instead, they were draining those pools faster than you can say “rug pull.”
Thomas Smith’s sentencing date hasn’t been announced yet. Kyle Nagy? Still missing in action. Related coverage: Young Crypto Fraudster Gets 375-Year Prison.
The whole SafeMoon saga really shows how fast things can go sideways in crypto. The company’s tokenomics model looked innovative on paper, drawing in tons of retail investors who thought they’d found the next big thing. Prosecutors proved that leadership’s public promises about fund security were complete BS, designed to keep the money flowing while they looted the treasury.
During the trial, evidence showed Karony and his crew maintained total control over those liquidity pools despite telling everyone otherwise. They covered their tracks pretty well, but investigators managed to trace the money back to them anyway. Court documents reveal they went to serious lengths to hide what they were doing, but the paper trail doesn’t lie.
The fallout keeps spreading. Tons of first-time crypto investors got burned, and many of them were people who couldn’t really afford to lose that money. The restitution process is still grinding through the courts, so nobody knows exactly how much victims might get back. That uncertainty just makes everything worse for people who already lost their shirts.
Crypto folks are watching this case closely because it shows how easy it is for bad actors to exploit the space. The SEC has been cracking down hard on fraudulent crypto schemes, but SafeMoon’s scale and profile make it stand out. The company reached billions in market cap before everything came crashing down.
Current SafeMoon leadership hasn’t said much since the verdict. CEO John Doe went radio silent, leaving investors and stakeholders wondering what happens next. The company’s silence isn’t helping anyone’s confidence right now. This follows earlier reporting on Virginia Crypto ATM Bill Awaits Governors.
Crypto exchanges that listed SafeMoon are getting some heat too, even though they weren’t directly involved in the fraud. People are asking tough questions about due diligence and how these platforms decide which tokens to list. It’s raising concerns about whether exchanges do enough homework before letting retail investors trade sketchy tokens.
Victims are still waiting to see how much money they might recover through restitution. The court hasn’t set final amounts yet, but whatever number they land on will determine how much financial relief is available. The whole mess shows how one bad actor can wreck things for thousands of regular people who just wanted to invest in crypto.
Karony starts his eight-year sentence while investigators keep hunting for Nagy.
The SafeMoon collapse mirrors other high-profile crypto frauds that dominated headlines during the 2021-2022 bull market. FTX’s Sam Bankman-Fried received a 25-year sentence for similar investor fraud schemes, while Celsius Network’s Alex Mashinsky faces ongoing prosecution for misleading customers about platform safety. These cases collectively represent billions in investor losses across the crypto ecosystem.
Federal prosecutors have secured convictions in over 30 major cryptocurrency fraud cases since 2022, according to Justice Department data. The aggressive enforcement reflects growing regulatory pressure as crypto adoption spreads beyond early adopters to mainstream investors. Karony’s eight-year sentence falls within typical ranges for crypto fraud, though penalties vary widely based on loss amounts and cooperation levels.
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