The SafeMoon Scandal has left the once-hyped DeFi project in ruins, with CEO Braden Karony convicted of defrauding investors. Found guilty of securities fraud, wire fraud, and money laundering, Karony faces up to 45 years in prison. This article unravels the crypto fraud case that shattered trust in SafeMoon.
A Deceptive Promise Exposed
Price fluctuation of SafeMoon’s SFM token, screenshot from CoinMarketCap at 03 PM on May 22, 2025.
The SafeMoon Scandal centers on Karony’s betrayal of investors. SafeMoon, a 2021 bull market darling, marketed its token as a revolutionary profit-sharing model. A 10% transaction fee was split: half redistributed to token holders, half locked in a liquidity pool for trading stability. Prosecutors revealed this was a facade. Karony and accomplices secretly accessed the pool, siphoning millions for personal gain, as detailed in the U.S. Department of Justice’s findings.
U.S. Attorney Joseph Nocella Jr. stated, “SafeMoon was anything but safe, a pipe dream for investors misled by Karony.” The crypto fraud case exposed how Karony pocketed over $9 million, using funds for luxury purchases like an Audi R8, Tesla, custom trucks, and a $2.2 million Utah property. He concealed trades through pseudonymous wallets and unhosted exchange accounts, complicating tracing efforts.
Accomplices: Guilty Pleas and Fugitives
The SafeMoon Scandal implicated others. Thomas Smith, former CTO, pleaded guilty and awaits sentencing, testifying against Karony. Co-founder Kyle Nagy remains at large, reportedly fleeing to Russia. Despite public claims of not trading SafeMoon tokens, Karony and his team profited by buying and selling during price peaks, further fueling the securities fraud charges.
The FBI, IRS, Homeland Security Investigations, and SEC collaborated to unravel the scheme. The money laundering charges stem from Karony’s efforts to obscure the stolen funds’ origins, undermining investor confidence in the crypto fraud case.
SafeMoon’s Collapse and Rebranding
The SafeMoon Scandal triggered SafeMoon’s downfall. Declaring bankruptcy in December 2023, the project was acquired by VGX Foundation. Once valued at $8 billion, SafeMoon’s token, SFM, now languishes with a $7.2 million market cap and sub-$1 million daily trading volume, per CoinGecko data. In February 2025, SafeMoon pivoted to a Solana-based memecoin, abandoning its DeFi roots, development team, and roadmap, now relying solely on community support.
Online sentiment reflects disillusionment, with X posts lamenting SafeMoon’s demise and praising whistleblowers who flagged the scam early. The wire fraud conviction underscores the risks of unchecked crypto projects.
Conclusion
The SafeMoon Scandal marks a cautionary tale in crypto. Karony’s conviction for securities fraud, wire fraud, and money laundering exposes the greed behind SafeMoon’s collapse. With a potential 45-year sentence and a shattered $7.2 million market cap, the crypto fraud case highlights the need for vigilance in the volatile crypto fraud case landscape.
