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The Safemoon saga is an example of how community tokens can go wrong even with good intensions. Safemoon was one of the first meme coins on BNB, the team behind it, were themselves surprised by the success. But for some it was success, for others it was fraud.
Guilty Plea in Fraud Scheme
SafeMoon’s Chief Technology Officer, Thomas Smith, has pleaded guilty to securities fraud conspiracy and wire fraud conspiracy in a $200 million crypto scheme, according to a Feb. 20 court filing. This reverses his previous not-guilty plea.
If convicted, wire fraud conspiracy carries a 20-year sentence, while securities fraud conspiracy could result in 25 years in prison.
Allegations Against SafeMoon Executives
Smith, along with SafeMoon CEO Braden Karony and founder Kyle Nagy, was charged in November 2023 for allegedly misleading investors. They claimed SafeMoon’s liquidity was locked, preventing them from accessing funds—when in reality, they could, and allegedly did, siphon off over $200 million for luxury cars and real estate.
SafeMoon’s market cap peaked between $5.7 billion and $8 billion before crashing nearly 50% on April 20, 2021, when news broke that the liquidity pool wasn’t locked.
Legal Developments
- Smith and Karony were arrested in 2023, while Nagy remains at large, reportedly in Russia.
- Karony pleaded not guilty and tried to dismiss the charges.
- A judge denied Karony’s request to delay his trial, which begins April 7, 2025.
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