Quick Summary:
- SafeMoon Chief Executive Braden Karony, convicted in a $2B crypto fraud case
- Found guilty of conspiracy to commit securities fraud, wire fraud and money laundering
- Pays up to 45 years of prison
- The judge ordered them to forfeit properties that amounted to $2 million
- The money which is reserved to cover investor protection was diverted to buy luxuries
- SafeMoon was attacked as a phony set-up by U.S. Attorney
- Thomas Smith, who was a co-conspirator, has entered a plea to a guilty offense; Kyle Nagy is still on the run
The Collapse of the Founder of SafeMoon
The Brooklyn jury of federal court in a landmark case has convicted Braden Karony, the CEO of SafeMoon cryptocurrency company of having planned a 2 billion dollar cryptocurrency make up. In a 12-day trial presided over by Judge Eric R. Komitee, Karony was found guilty of conspiracy to commit securities and wire fraud, and money laundering.
Karony was also guilty of deceiving investors by stating that the cash held in SafeMoon liquidity pools had no risk since it was locked and could only be used in business. In fact, he and his partners were siphoning millions of money to be used personally.
Lavish Lifestyle Off the Investor Money
The U.S. Department of Justice reported that Karony used investor funds in order to enjoy luxury life. He bought a 2.2-million-dollar house in Utah, luxury cars such as Audi R8, Tesla and made custom made trucks, all this time SafeMoon investors were made to believe that their money was safe.
It was a fraud based on a 10 percent transaction fee on each SafeMoon trade, which was meant to favor holders. Instead, Karony sold SafeMoon behind the curtains and made millions of personal gains.
“It is a Scam of a Scam That Ripped Off the Investors”
U.S. Attorney Joseph Nocella, Jr. was blunt and he said:
“SafeMoon was the facsimile project that robbed users and damaged crypto-currencies market.”
His harsh words refer to the increased outcry on the missing regulation of the crypto world.
What Next to Co-Conspirators?
One of Karony partners, Thomas Smith has already entered a plea of guilt, and is waiting to be sentenced.
The third in the scandal, Kyle Nagy went on the run.
With the crypto community rocked once again by a yet another high-profile trial, this verdict highlights the fact that due to the nature of blockchain-based projects, it is high time that transparency and accountability were required.