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- Former SafeMoon CEO Braden Karony received over eight years in federal prison
- Prosecutors proved investor funds were siphoned from “locked” liquidity pools
- The case stands as one of the most high-profile meme coin fraud convictions
Braden Karony, the former CEO of SafeMoon, has been sentenced to 100 months in federal prison for his role in a crypto fraud tied to the project’s liquidity pool. A jury found Karony guilty of securities fraud, wire fraud, and money laundering after prosecutors demonstrated that investor funds were secretly misappropriated while publicly described as locked and untouchable.
The sentence was handed down by U.S. District Judge Eric Komitee in the Eastern District of New York. During the hearing, the court weighed arguments about Karony’s personal background against testimony from victims who described severe financial losses. In the end, the scale and intent of the misconduct carried more weight.
How the Scheme Actually Worked
According to prosecutors, Karony personally withdrew more than $9 million in crypto from wallets that investors were told could not be accessed. These funds were not just taken quietly. Prosecutors showed that Karony also engaged in manipulative trading designed to inflate the price of the SFM token, creating the illusion of momentum while liquidity was being drained behind the scenes.
The wallets involved were marketed as part of SafeMoon’s core safety promise. Investors believed the liquidity was locked to protect against rug pulls. Instead, the jury concluded the controls were an illusion, and that insider access was deliberately concealed.
From Viral Hype to Bankruptcy
SafeMoon launched in 2021 on the BNB Chain and quickly became one of the most visible meme-style DeFi tokens of that cycle. It promoted itself as community-driven and introduced a 10% transaction fee model that rewarded holders and funded liquidity. At the height of influencer promotion in April 2021, the token reached a multibillion-dollar market capitalization.
That momentum didn’t last. Regulators later said investor funds were routinely used for personal expenses while public messaging reassured holders that assets were secure. In November 2023, the SEC and DOJ filed charges outlining undisclosed wallet control and diversion of funds. SafeMoon filed for Chapter 7 bankruptcy the following month, and the token became largely illiquid soon after.
Guilty Pleas and Confirmed Deception
The case against Karony was strengthened by cooperation from within the project. Thomas Smith, SafeMoon’s former CTO, pleaded guilty in 2025 to related conspiracy charges. His plea confirmed that senior team members knowingly misled investors and siphoned liquidity-pool assets for personal benefit.
That cooperation helped prosecutors frame the project not as a failed experiment, but as a coordinated scheme that exploited DeFi hype and retail trust. The jury ultimately agreed.
A Warning for the Meme Coin Era
Karony’s conviction is one of the most visible criminal outcomes tied to a meme coin project. Prosecutors argued that SafeMoon wasn’t just reckless or poorly managed, but that it used the language of decentralization to disguise what amounted to theft.
The case sends a clear signal. Marketing something as DeFi does not shield it from traditional fraud laws. For an industry still rebuilding trust, SafeMoon now stands as a reminder of what happens when hype replaces accountability.
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