UPDATE: SafeMoon CEO Sentenced to 100 Months in Prison for Multi-Million Crypto-Fraud Scheme That Allegedly Funded Lavish Lifestyle

By the Constantine Cannon Whistleblower Team

On February 10, SafeMoon CEO Braden John Karony was sentenced to 100 months in prison for conspiracy to commit securities fraud, wire fraud, and money laundering connected to a scheme to defraud investors with a digital asset named “SafeMoon.”

Karony was also ordered to forfeit roughly $7.5M. Restitution for victims will be determined at a later date. Karony was convicted by a federal jury in May 2025. The verdict also required Karony to forfeit two residential properties.

According to United States Attorney Joseph Nocella, Jr., “Karony lied to investors from all walks of life—including military veterans and hardworking Americans—and defrauded thousands of victims in order to buy mansions, sports cars, and custom trucks. [The] sentence demonstrates that there are significant consequences for financial crimes…”

What Was SafeMoon?

As we previously reported, SafeMoon first launched in March 2021 on a public blockchain with “SafeMoon” tokens as digital assets. Under the design of SafeMoon’s smart contract, each transaction automatically incurred a 10% tax. For example, if a holder transferred 10 SafeMoon tokens to another user, 1 token would be withheld as a tax, and the recipient would receive the remaining 9 tokens.

According to the project’s marketing materials, the revenue generated from this 10% tax was divided into two separate 5% portions, each of which was represented as providing specific benefits to SafeMoon holders.

The first 5% portion of the tax was represented as being “reflected” back to all SafeMoon holders distributed in proportion to their existing balances, thereby automatically increasing the amount of SafeMoon each investor held. The remaining 5% was described as being allocated to designated SafeMoon “liquidity” pools. A larger liquidity pool was said to enhance overall market liquidity for SafeMoon.

In the months following its launch in March 2021, SafeMoon expanded to millions of holders and reached a market capitalization exceeding $8 billion.

What Was the Alleged Fraudulent Scheme?

Karony and his co-conspirators allegedly made a series of material misrepresentations to investors regarding the SafeMoon offering. Among other things, they claimed that SafeMoon operated with “locked” liquidity pools that would automatically grow through the 10% tax applied to every transaction. They also asserted that these “locked” liquidity pools prohibited the defendants and insiders from a “rug pull,” a form of crypto fraud in which liquidity is removed from the SafeMoon liquidity pool. The tokens were supposed to be used for pre-defined business purposes rather than for personal benefit. Defendants would manually add token pairs to the SafeMoon liquidity pool when transactions occurred on certain centralized exchanges and used liquidity for personal benefit and trading,  among other allegations.

Co-conspirator Thomas Smith pleaded guilty in February 2025 to conspiracy to commit securities fraud and wire fraud. He awaits sentencing. Co-conspirator Kyle Nagy is still at large.

The SEC’s Whistleblower Program

The Securities and Exchange Commission (SEC) enforces federal securities laws and helps protect against securities fraud. Whistleblowers can be eligible for rewards under the SEC Whistleblower Program, which can award individuals with up to 30% of any government recovery in cases initiated by information provided by the whistleblower.

“Crypto innovation does not excuse fraud. Cases like this demonstrate that when the government fights securities fraud and enforces anti-money laundering laws, it preserves the integrity of the markets that power our economy,” said Constantine Cannon partner Marlene Koury.

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If you have information concerning securities fraud, wire fraud, or other types of misconduct, please contact our team to discuss your options as a potential whistleblower.

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