Barstool Sports founder Dave Portnoy recently told Fox Business’ *Varney & Co.* that he will not sell his Bitcoin holdings even if the cryptocurrency drops to zero. He told host Stuart Varney, “I’m holding on forever, even if it goes to zero,” adding that he would rather “go down with the ship” this time than repeat his past mistake of selling only to see prices surge afterward. Portnoy admitted he bought Bitcoin at a high near $100,000 and is now sitting on millions in unrealized losses. He confessed that his Bitcoin trade is “the biggest mistake I’ve ever made,” noting that every time he sells, prices skyrocket, and every time he buys, prices drop. Notably, Portnoy has a history of controversial moves in the meme coin space: In February 2025, he launched the GREED token on Pump.fun, bought 35.79% of its total supply, then dumped all his holdings at once, causing the token to crash 99% while he pocketed around $258,000 in profits. After facing backlash, he released GREED2 and JAILSTOOL in succession, admitting during a live stream that he “did consider a rug pull, and might still be thinking about it.” He has also been involved in the collapse of the LIBRA token, which was endorsed by Argentine President Javier Milei: he bought $4.5 million worth of the token, later recovering $5 million in compensation. Earlier, he settled a lawsuit related to SafeMoon for $20,000.
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The ex-CEO of SafeMoon faces 100 months behind bars after a sentencing on Tuesday. Braden John Karony and his cohorts were accused and convicted of taking millions from their crypto operation for their own gain, including spending to support lavish lifestyles. Former SafeMoon CEO Braden John Karony will face an 8-year prison sentence after being convicted last year on a string of federal charges tied to defrauding investors in his digital assets operation.
The 100-month sentence was handed down Tuesday in U.S. District Court for the Eastern District of New York, and Karony must also forfeit $7.5 million and two residences in the case.
“Karony lied to investors from all walks of life — including military veterans and hard-working Americans — and defrauded thousands of victims in order to buy mansions, sports cars, and custom trucks,” stated United States Attorney Nocella, in a statement. “Our office will continue to vigorously prosecute economic crimes that harm investors and weaken societal trust in the stability and security of digital asset markets.”
Karony was said to have participated in manipulating the price of the SafeMoon token and illicitly controlling liquidity pools in the failed Utah-based company to drain millions of dollars, according to the Department of Justice. After a three-week trial, he was convicted of conspiracy to commit securities fraud, wire fraud, and money laundering.
In brief SafeMoon CEO Braden Karony was sentenced to 100 months in prison for his role in a crypto fraud scheme surrounding the SFM token. Karony was also ordered to forfeit $7.5 million for his crimes. One co-conspirator is awaiting sentencing, while another is still at large. SafeMoon CEO Braden John Karony was sentenced to 100 months in prison Tuesday by District Judge Eric Komitee of the Eastern District of New York for his role in a scheme that defrauded investors in the SafeMoon (SFM) token.
Karony, who could have faced up to 45 years in prison, was convicted last May on conspiracy to commit securities fraud, wire fraud, and money laundering. In addition to the sentence, Karony was ordered to forfeit $7.5 million, with victim restitution still to be determined.
His defense noted Karony’s still-developing brain, his parents' service to the country, and his kindness, according to courtroom reporting from Inner City Press. The pleading apparently landed on deaf ears, though his sentence—8 years and 4 months—falls short of the government’s requested 12-year sentence for his crimes.
“Karony lied to investors from all walks of life—including military veterans and hard working-Americans—and defrauded thousands of victims in order to buy mansions, sports cars, and custom trucks,” stated United States Attorney Joseph Nocella, in a statement. “Today’s sentence demonstrates that there are significant consequences for financial crimes.”
SafeMoon grew to around an $8 billion market cap in 2021 using a 10% transaction tax mechanic designed to benefit holders. From that tax, half was designed to automatically redeploy to token holders, while the other half was supposed to enter liquidity pools to strengthen trading of the asset.
But Karony was found to have diverted and misappropriated funds designed for those liquidity pools, defrauding investors in the token by maintaining access to what they thought were “locked” tokens.
“He deceived investors, using their funds to lavishly expand his portfolio with million-dollar homes and luxury cars,” IRS-CI New York Special Agent in Charge Harry Chavis said in a statement. “By employing complex transactions to obscure the movement of these illicit proceeds, Karony acquired over $9 million in crypto assets.”
Karony and his co-conspirator Thomas Smith were originally charged in 2023 and hit with a civil suit from the SEC as well. Smith pleaded guilty to conspiracy to commit securities fraud and wire fraud, and is awaiting sentencing.
A third alleged co-conspirator, Kyle Nagy, remains at large according to the United States Attorney’s Office of the Eastern District of New York.
Daily Debrief NewsletterStart every day with the top news stories right now, plus original features, a podcast, videos and more.
In brief SafeMoon CEO Braden Karony was sentenced to 100 months in prison for his role in a crypto fraud scheme surrounding the SFM token. Karony was also ordered to forfeit $7.5 million for his crimes. One co-conspirator is awaiting sentencing, while another is still at large. SafeMoon CEO Braden John Karony was sentenced to 100 months in prison Tuesday by District Judge Eric Komitee of the Eastern District of New York for his role in a scheme that defrauded investors in the SafeMoon (SFM) token.
Karony, who could have faced up to 45 years in prison, was convicted last May on conspiracy to commit securities fraud, wire fraud, and money laundering. In addition to the sentence, Karony was ordered to forfeit $7.5 million, with victim restitution still to be determined.
His defense noted Karony’s still-developing brain, his parents' service to the country, and his kindness, according to courtroom reporting from Inner City Press. The pleading apparently landed on deaf ears, though his sentence—8 years and 4 months—falls short of the government’s requested 12-year sentence for his crimes.
“Karony lied to investors from all walks of life—including military veterans and hard working-Americans—and defrauded thousands of victims in order to buy mansions, sports cars, and custom trucks,” stated United States Attorney Joseph Nocella, in a statement. “Today’s sentence demonstrates that there are significant consequences for financial crimes.”
SafeMoon grew to around an $8 billion market cap in 2021 using a 10% transaction tax mechanic designed to benefit holders. From that tax, half was designed to automatically redeploy to token holders, while the other half was supposed to enter liquidity pools to strengthen trading of the asset.
But Karony was found to have diverted and misappropriated funds designed for those liquidity pools, defrauding investors in the token by maintaining access to what they thought were “locked” tokens.
“He deceived investors, using their funds to lavishly expand his portfolio with million-dollar homes and luxury cars,” IRS-CI New York Special Agent in Charge Harry Chavis said in a statement. “By employing complex transactions to obscure the movement of these illicit proceeds, Karony acquired over $9 million in crypto assets.”
Karony and his co-conspirator Thomas Smith were originally charged in 2023 and hit with a civil suit from the SEC as well. Smith pleaded guilty to conspiracy to commit securities fraud and wire fraud, and is awaiting sentencing.
A third alleged co-conspirator, Kyle Nagy, remains at large according to the United States Attorney’s Office of the Eastern District of New York.
Daily Debrief NewsletterStart every day with the top news stories right now, plus original features, a podcast, videos and more.
Two of the most prominent crypto fraud cases in the U.S. courts moved in different directions today, 10 February.
In one case, the former chief executive of SafeMoon received a prison sentence following conviction. In another, Sam Bankman-Fried, the former head of collapsed exchange FTX, filed a fresh bid seeking to reopen his case.
SafeMoon CEO sentenced after victim testimony A federal judge in New York sentenced John Karony, the former CEO of SafeMoon, to 100 months in prison, according to courtroom reporting by Inner City Press.
During the sentencing hearing, multiple victims described how they invested in SafeMoon after being reassured by Karony’s public statements and personal engagement with the community.
Several said the losses reshaped their financial futures, preventing home purchases and affecting education plans.
U.S. prosecutors sought a 12-year sentence, arguing Karony deliberately misled investors and showed no remorse. The defense cited his age and background to mitigate the punishment.
The judge rejected those arguments, describing the scheme as “a massive fraud” and stating it was “more like theft than fraud,” emphasizing that investors had been explicitly assured there would be no rug pull.
The sentence marks a final chapter in one of the most widely followed cases to reach U.S. courts.
SBF files long-shot motion for new trial In a separate development, Bankman-Fried filed a pro se motion seeking a new trial on his FTX fraud conviction, according to Bloomberg.
The filing, dated 5 February and docketed Tuesday in Manhattan federal court, argues that new witness testimony could undermine the government’s case.
The request is separate from Bankman-Fried’s formal appeal. It comes after a federal appeals court rejected his attempt to secure release while that appeal is pending.
The Second Circuit ruled in December that he had not demonstrated a substantial likelihood of success.
Bankman-Fried was convicted in November 2023 on seven counts of fraud and conspiracy and sentenced in March 2024 to 25 years in prison.
Prosecutors said he misappropriated billions of dollars in FTX customer funds to support risky trading at Alameda Research, political donations, and luxury real estate purchases.
Cases enter different phases Together, the two developments highlight how high-profile crypto prosecutions are diverging in 2026.
While the SafeMoon case has reached sentencing, delivering closure for victims, the FTX case continues to generate procedural filings as its former executive pursues post-conviction relief.
Final Thoughts The SafeMoon sentencing reflects courts moving toward final judgments in retail-focused crypto fraud cases. Bankman-Fried’s filing underscores how larger cases can remain active for years through appeals and post-conviction motions.
What Did the Court Decide? Braden John Karony, the former chief executive of SafeMoon US LLC, has been sentenced to just over eight years in federal prison after prosecutors said he deceived investors and diverted millions of dollars in digital assets for personal use. The sentence was handed down following his conviction on multiple fraud-related charges.
According to a statement from the U.S. Attorney’s Office for the Eastern District of New York, Karony was also ordered to forfeit roughly $7.5 million and two residential properties. Prosecutors said he obtained about $9 million in crypto assets and used portions of those funds to purchase a $2.2 million home in Utah, along with luxury vehicles including an Audi R8, a Tesla, and a custom Ford F-550.
Karony, 29, was convicted by a federal jury in May on charges of conspiracy to commit securities fraud, wire fraud, and money laundering. The case centers on the operation and promotion of the SafeMoon token, which at its peak in 2021 reached a market capitalization of more than $8 billion.
Investor Takeaway The SafeMoon case reinforces how token design and fee mechanics can become legal liabilities when disclosures diverge from actual fund usage.
How Did the SafeMoon Token Structure Work? SafeMoon was promoted as a community-driven token with built-in incentives for long-term holding. Every transaction was subject to a 10% fee, automatically applied whenever tokens were transferred between users, prosecutors said.
As presented to investors, that 10% fee was divided into two equal parts. One 5% portion was redistributed to existing holders, while the remaining 5% was directed to liquidity pools intended to support trading and price stability. Project materials described part of this liquidity as “locked,” creating the impression that the funds could not be accessed by insiders.
U.S. prosecutors said those representations did not match reality. In court filings, they alleged that Karony and his co-conspirators diverted millions of dollars from the liquidity pool despite assurances given to investors that the funds were restricted. That diversion, prosecutors said, enabled personal spending rather than serving the stated purposes of the token’s design.
The case highlights how tokenomics, often marketed as automated and trust-minimized, can still rely heavily on centralized control behind the scenes. When that control is abused, the legal consequences can mirror those seen in traditional securities fraud cases.
What Did Prosecutors and Investigators Say? Federal authorities framed the case as a straightforward example of investor deception rather than a technical dispute over crypto regulation. In the statement announcing the sentence, FBI Assistant Director in Charge James Barnacle said Karony exploited his role as chief executive to enrich himself at the expense of token holders.
“Not only did Braden John Karony abuse his position as CEO, but he also betrayed his investors’ trust by stealing more than nine million dollars in digital assets from his company to fund his lavish lifestyle,” Barnacle said.
The prosecution relied on transaction records, internal communications, and blockchain analysis to trace how funds moved from purportedly restricted pools to wallets under the control of Karony and others. Those records were used to link investor fees directly to personal purchases.
The approach reflects a broader enforcement pattern in crypto cases, where authorities focus less on abstract questions about whether a token is a security and more on whether statements made to investors were accurate and whether funds were used as described.
Investor Takeaway Regulators are treating misrepresentation and misuse of token fees in much the same way as traditional financial fraud, regardless of blockchain branding.
What Happens to Other Defendants? The SafeMoon case involved multiple individuals. Prosecutors said Thomas Smith, identified as a co-conspirator, pleaded guilty in February 2025 and is awaiting sentencing. Another alleged participant, Kyle Nagy, remains at large, according to court records.
The staggered outcomes reflect the differing roles and cooperation levels among defendants. Guilty pleas and cooperation agreements often result in separate sentencing timelines, while defendants who remain outside U.S. jurisdiction can delay full resolution of a case.
For the broader crypto market, the sentencing closes one chapter of a high-profile collapse that drew intense retail interest during the last market cycle. SafeMoon became a case study in how rapidly token valuations can rise on social momentum and marketing, and how quickly they can unravel once governance and fund flows come under scrutiny.
What Does the Case Mean for Crypto Enforcement? The Karony sentence adds to a growing list of criminal cases tied to digital asset projects that raised large sums from retail investors. U.S. authorities have increasingly leaned on fraud, wire fraud, and money laundering statutes rather than crafting new crypto-specific criminal charges.
That approach lowers the threshold for enforcement. Prosecutors do not need to resolve unsettled regulatory debates about token classification if they can show that investors were misled and funds were diverted. As a result, founders and executives face exposure not just from regulators, but from criminal courts.
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PANews reported on February 11 that, according to The Block, the U.S. Attorney's Office for the Eastern District of New York announced on Tuesday that former SafeMoon CEO Braden John Karony was sentenced to more than eight years in prison for defrauding investors and had approximately $7.5 million and two residential properties forfeited. The 29-year-old Karony was convicted by a federal jury in May of securities fraud, wire fraud, and conspiracy to commit money laundering. Prosecutors stated that he misled investors through false advertising, illegally misappropriating over $9 million in project funds to maintain a lavish lifestyle, including purchasing a $2.2 million Utah residence, an Audi R8 sports car, a Tesla, and a custom Ford F-550 truck.
The SafeMoon project issued its tokens in 2021, at one point reaching a market capitalization exceeding $8 billion. Its transactions included a 10% tax mechanism, half of which was supposed to be injected into a liquidity pool. However, prosecutors allege that Karony and his accomplices fraudulently transferred millions of dollars from this pool for personal use. His accomplice, Thomas Smith, pleaded guilty in February 2025 and is awaiting sentencing; another accomplice, Kyle Nagy, remains at large.
Former SafeMoon CEO Braden Karony has been sentenced to 100 months in prison for stealing $9 million from the crypto platform’s liquidity pool in 2021 to fund a “lavish lifestyle.”
The sentence on Monday comes nine months after Karony was convicted by a federal jury on charges of conspiracy to commit securities fraud, wire fraud and money laundering in May 2025.
“Not only did Braden John Karony abuse his position as CEO, but he also betrayed his investors’ trust by stealing more than nine million dollars in digital assets from his company to fund his lavish lifestyle,” FBI assistant director James C. Barnacle, Jr. said.
Karony used the stolen proceeds to purchase a $2.2 million home in Utah, an Audi R8 sports car, a Tesla, a custom Ford F-550 and Jeep Gladiator pickup trucks.
“Karony lied to investors from all walks of life — including military veterans and hard-working Americans,” US Attorney Joseph Nocella, Jr. said, adding:
“Today’s sentence demonstrates that there are significant consequences for financial crimes. Our Office will continue to vigorously prosecute economic crimes that harm investors and weaken societal trust in the stability and security of digital asset markets.”Source: Ariel Givner
Karony was ordered to forfeit approximately $7.5 million, the Department of Justice said, while the amount of restitution to the victims will be determined at a later date.
Two SafeMoon execs convicted, one at largeSafeMoon’s former chief technology officer, Thomas Smith, pleaded guilty in February 2025 to conspiracy to commit securities and wire fraud and is awaiting sentencing.
SafeMoon platform’s creator, Kyle Nagy, remains at large, the DOJ added.
Karony is one of many former crypto executives who have now been convicted and sentenced for crimes committed during the 2021-2022 market cycle, when retail market participation was at its peak.
Others who have been convicted include former FTX CEO Sam Bankman-Fried and former Celsius CEO Alex Mashinsky, who are currently serving 25-year and 12-year sentences, respectively.
US President Donald Trump said on Jan. 8 that he wouldn’t pardon the former FTX boss, despite having pardoned former Binance CEO Changpeng “CZ” Zhao in October.
Bankman-Fried hasn’t given up, having asked a federal appeals panel for a new trial on Thursday.
Magazine: The critical reason you should never ask ChatGPT for legal advice
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Ex SafeMoon CEO Braden Karony has received a 100-month sentence for stealing millions in customer funds and using them for personal gains.
A United States District Judge passed the sentencing in a Brooklyn federal court on Monday. Karony was convicted last year in May, when a federal jury found him guilty of conspiracy to commit securities fraud, wire fraud, and money laundering.
Besides the prison term, Karony has been asked to forfeit $7.5 million and two residential properties. He would also be required to pay restitution for the damages caused, but the exact amount had not been determined.
“Karony lied to investors from all walks of life—including military veterans and hard working-Americans—and defrauded thousands of victims in order to buy mansions, sports cars, and custom trucks,” U.S. Attorney Joseph Nocella, Jr said in an accompanying statement.
Karony and company misled investors Karony and his co-conspirators—Thomas Smith, who served as SafeMoon’s chief technology officer, and Kyle Nagy, the project’s creator—had orchestrated a major fraud and managed to defraud over a million investors. According to details submitted in court, they imposed a 10% tax on every transaction, marketing it as a mechanism to support liquidity pools that were supposedly locked to prevent fund withdrawals by insiders.
Federal prosecutors were able to prove that the defendants maintained secret access to these pools and were effectively using them as a slush fund to finance their lavish lifestyle.
The SafeMoon token (SFM) at one point managed to reach a market capitalization of over $8 billion during the 2021 crypto boom, but subsequently crashed more than 98% after the exposure of the fraud and the bankruptcy of the company in late 2023.
Smith pleaded guilty in February 2025 and testified against Karony in a deal that led to his sentencing. Meanwhile, Nagy remains at large, with some reports suggesting he may have fled to Russia.
Former SafeMoon CEO Braden John Karony received a 100-month prison sentence in federal court in Brooklyn after being convicted on charges of conspiracy to commit securities fraud, wire fraud, and money laundering. A federal jury found Karony guilty in May 2025 following a three-week trial for his role in defrauding investors in the SafeMoon digital asset.
Judge Eric Komitee also ordered Karony to forfeit approximately $7.5 million, with additional restitution to victims to be determined at a later hearing.
The U.S. Attorney's Office for the Eastern District of New York announced the sentencing on Tuesday, with prosecutors stating that Karony used investor funds to purchase mansions, sports cars, and custom trucks while lying to investors about how their money would be used.
What Was SafeMoon And How Did It Work?SafeMoon launched in March 2021 as a digital asset issued by SafeMoon LLC on a public blockchain. The token quickly gained attention and grew to millions of holders with a market capitalization exceeding $8 billion in the months following its launch.
The SafeMoon smart contract included a unique 10% transaction tax applied automatically to every transfer. When a holder transferred 10 SafeMoon tokens to another user, 1 token was automatically retained as tax while the remaining 9 tokens went to the recipient.
According to marketing materials provided to investors, the 10% tax was split into two equal parts. The first 5% was supposed to be "reflected" back to all SafeMoon holders proportionally, automatically increasing the total quantity of tokens held by every investor. The second 5% was supposed to be deposited into designated SafeMoon liquidity pools.
Liquidity pools are smart contracts that hold pairs of tokens to facilitate trading. Larger liquidity pools generally mean more stable prices and easier trading for token holders. SafeMoon marketed these pools as "locked," which implied that developers and insiders could not access or withdraw the funds.
How Did Karony Defraud SafeMoon Investors?Karony and his co-conspirators made several material misrepresentations to investors about how SafeMoon operated. They claimed the liquidity pools were "locked" and would automatically increase in size due to the 10% transaction tax.
They also told investors that locked liquidity pools prevented developers from executing a "rug pull," a type of crypto fraud where project creators suddenly withdraw all liquidity from a project, leaving investors with worthless tokens.
A rug pull represents one of the most damaging scams in decentralized finance. When liquidity is removed from a pool, token holders cannot sell their assets at reasonable prices, often losing their entire investment. SafeMoon's marketing specifically promised protection against this scenario.
Additional false claims included that tokens in the liquidity pool would only be used for limited business purposes rather than personal enrichment, that developers would manually add token pairs to the pool when transactions occurred on centralized exchanges, and that the development team did not hold or trade SafeMoon tokens for personal benefit.
The Reality Behind The FraudIn reality, Karony and his co-conspirators retained access to the SafeMoon liquidity pools and intentionally diverted millions of dollars worth of tokens for personal use. Despite public denials, they repeatedly bought and sold SafeMoon tokens, sometimes at peak market prices, generating millions in profits.
The defendants used sophisticated methods to hide their fraudulent activity. They moved stolen funds through numerous private crypto wallet addresses, employed complex transaction routing, and used pseudonymous accounts on centralized exchanges to obscure the trail of illicit proceeds.
Karony personally acquired over $9 million in crypto assets through the scheme. He used these funds to purchase luxury items including:
A $2.2 million home in UtahAdditional residential properties in Utah and KansasA $277,000 Audi R8 sports carA second Audi R8A Tesla vehicleCustom Ford F-550 and Jeep Gladiator pickup trucksThe jury ordered the forfeiture of two residential properties as part of the verdict.
What Did Federal Prosecutors Say About The Case?U.S. Attorney Joseph Nocella stated that Karony "lied to investors from all walks of life, including military veterans and hard-working Americans, and defrauded thousands of victims in order to buy mansions, sports cars, and custom trucks." Nocella emphasized that the sentence demonstrates significant consequences for financial crimes and that his office will continue prosecuting economic crimes that harm investors and weaken trust in digital asset markets.
FBI Assistant Director James Barnacle noted that Karony "abused his position as CEO" and "betrayed his investors' trust by stealing more than nine million dollars in digital assets from his company to fund his lavish lifestyle." The FBI remains committed to addressing fraud in the digital asset marketplace.
IRS Criminal Investigation Special Agent in Charge Harry Chavis explained that Karony "exploited his access to SafeMoon's liquidity pool to divert and misappropriate millions in cryptocurrency" and used complex transactions to obscure the movement of illicit proceeds. However, IRS special agents successfully traced the financial transactions despite Karony's intricate schemes.
Homeland Security Investigations Acting Special Agent in Charge Michael Alfonso described the case as exposing "the deep betrayal at the heart of a scheme that preyed on the hopes and trust of SafeMoon investors" and affected over a million victims.
What Happened To Karony's Co-Conspirators?Thomas Smith, SafeMoon's former chief technology officer, pleaded guilty in February 2025 to conspiracy to commit securities fraud and wire fraud. Smith is currently awaiting sentencing, with no date announced.
Kyle Nagy, identified as SafeMoon's creator, remains at large according to the Department of Justice. No information about his location or capture efforts has been made public.
How Does This Case Compare To Other Crypto Fraud Convictions?Karony joins a growing list of crypto executives convicted and sentenced for crimes committed during the 2021-2022 market cycle, when retail participation in crypto markets reached peak levels.
Former FTX CEO Sam Bankman-Fried is currently serving a 25-year sentence for fraud related to the collapse of his cryptocurrency exchange and misuse of customer funds. Former Celsius CEO Alex Mashinsky received a 12-year sentence for defrauding customers of his crypto lending platform.
Prosecutors initially sought a 12-year sentence for Karony but Judge Komitee ultimately imposed the 100-month term. Karony will also face three years of supervised release after completing his prison sentence. A separate hearing scheduled for April 23 will determine the total amount of restitution Karony must pay to victims.
ConclusionThe SafeMoon case demonstrates that federal prosecutors will pursue fraud charges in digital asset markets with the same vigor as traditional financial crimes. Karony's conviction involved conspiracy to commit securities fraud, wire fraud, and money laundering through misrepresenting how investor funds would be used and protected.
The 8-year sentence, combined with millions in forfeiture and pending restitution, sends a clear message about accountability in crypto markets. With one co-conspirator awaiting sentencing and another still at large, the SafeMoon prosecution continues to unfold as part of broader enforcement efforts targeting fraud from the 2021-2022 crypto market cycle.
ResourcesPress release by the office of the U.S. Attorneys Eastern District of New York: CEO of Digital Asset Company SafeMoon Sentenced to 100 Months in Prison for Multi-Million Dollar Crypto-Fraud Scheme
Report by Business Insider: Dogecoin's slide after the failed 'Doge Day' has crypto traders eyeing a replacement for the world's favorite meme token
Press release by the US DOJ: Samuel Bankman-Fried Sentenced to 25 Years for His Orchestration of Multiple Fraudulent Schemes
Report by CoinDesk: Ex-SafeMoon CEO gets 8-year prison sentence for defrauding investors
A US court has announced it has sentenced Braden John Karony, the former CEO of the cryptocurrency project SafeMoon, to eight years in prison.
Braden John Karony, the former CEO of cryptocurrency company SafeMoon (SFM), was on trial for securities fraud, electronic fraud, and money laundering for embezzling millions of dollars worth of SFM tokens between 2021 and 2022.
The court ruling determined that Karony embezzled millions of dollars by manipulating the token price and illegally controlling liquidity pools at the bankrupt Utah-based company SafeMoon.
The court stated that as a result of the trial, Karony was sentenced to 100 months in prison, ordered to pay $7.5 million in restitution, and had two of his properties confiscated.
U.S. Attorney General Joseph Nocella stated, “Karony lied to investors from all walks of life, including military veterans and hardworking Americans, and defrauded thousands of victims into buying mansions, sports cars, and custom-built trucks. Today’s sentencing demonstrates the significant consequences of financial crimes. Our office will continue to vigorously prosecute economic crimes that harm investors and undermine public confidence in the stability and security of digital asset markets.”
FBI Deputy Director James C. Barnacle, Jr. stated, “Braden John Karony not only abused his position as CEO, but also violated the trust of his investors by stealing more than nine million dollars in digital assets from his company to finance his lavish lifestyle.”
Aside from CEO Braden John Karony, co-founder Thomas Smith, who is also facing charges of the same crimes, pleaded guilty in February 2025 to participating in a conspiracy to commit securities fraud and electronic fraud, but his sentence has not yet been determined. Another partner, Kyle Nagy, is reportedly currently at large.
*This is not investment advice.
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Braden John Karony, the former Chief Executive Officer of SafeMoon, has been sentenced to eight years in prison after being found guilty of defrauding investors in his digital asset business.
In brief Braden John Karony, former SafeMoon CEO, was sentenced to eight years in prison for fraud and money laundering. The court ordered him to forfeit two homes and roughly 7.5 million dollars obtained through the scheme. Thomas Smith, a co-conspirator, has pleaded guilty and is awaiting sentencing, whereas Kyle Nagy remains at large. Eight-Year Sentence and Asset Forfeiture On Tuesday, Karony was handed a 100-month prison term following a three-week federal trial in May 2025, during which a jury found him guilty of financial and electronic fraud, as well as money laundering. In addition to his prison term, the court ordered him to forfeit two residential properties and approximately $7.5 million, according to the U.S. Attorney’s Office for the Eastern District of New York.
United States Attorney Nocella stated that Karony targeted investors from a wide range of backgrounds, deceiving thousands in the process. He added that the ill-gotten gains funded a lavish lifestyle that included luxury homes, high-end vehicles, and custom trucks, emphasizing that federal prosecutors remain committed to pursuing financial crimes that harm investors and undermine trust in cryptocurrency markets.
The scope of Karony’s misconduct extended even further, according to FBI Assistant Director in Charge James Barnacle, who noted that Karony misappropriated more than $9 million in digital assets from SafeMoon for personal use.
Not only did Braden John Karony abuse his position as CEO, but he also betrayed his investors’ trust by stealing more than nine million dollars in digital assets from his company to fund his lavish lifestyle. The FBI is committed to addressing fraud in the digital asset marketplace to level the playing field for Americans.
James Barnacle How the SafeMoon Fraud Unfolded Evidence presented at trial showed that Karony and his co-conspirators repeatedly assured investors that SafeMoon’s liquidity pool was secure, company funds would not be used for personal gain, and insiders were not trading the token. However, prosecutors demonstrated that these claims were false, revealing that:
The group continued to access liquidity funds, diverting millions of dollars for personal expenses. They traded SafeMoon tokens while publicly denying such activity, misleading investors and manipulating the market. The group routed the proceeds through complex cryptocurrency transactions to conceal their gains, with Karony personally obtaining more than $9 million, which he used to purchase luxury properties and high-end vehicles. Thomas Smith, one of Karony’s associates, pleaded guilty in February 2025 to participating in a scheme that defrauded investors through fraudulent securities transactions and electronic communications and is now awaiting sentencing. Kyle Nagy, another alleged participant, remains at large and is actively being sought by authorities.
Meanwhile, HSI New York Acting Special Agent in Charge Alfonso stated that the agency, in coordination with law enforcement partners, will continue efforts to hold accountable anyone who abuses investor trust, whether through conventional financial channels or cryptocurrency.
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Ifeoluwa O.
Ifeoluwa specializes in Web3 writing and marketing, with over 5 years of experience creating insightful and strategic content. Beyond this, he trades crypto and is skilled at conducting technical, fundamental, and on-chain analyses.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
Former SafeMoon CEO Braden Karony sentenced to 8 years for fraud tied to $9 million in misused liquidity funds.
Braden John Karony, SafeMoon’s former CEO, has been sentenced to 8 years in prison for his role in a multi-million dollar crypto fraud scheme.
U.S. District Judge Eric Komite handed out the judgment in a Brooklyn federal court after a jury convicted him in May 2025 following a three-week trial.
Details of The Sentencing Court documents show that Karony was found guilty of conspiracy to commit securities fraud, wire fraud, and money laundering. As part of the ruling, he has been ordered to forfeit approximately $7.5 million, while the amount of restitution to victims will be determined at a later date. The jury also issued a verdict instructing the forfeiture of two residential properties.
Meanwhile, one of his co-conspirators, Thomas Smith, pleaded guilty in February 2025 and is awaiting sentencing, while Kyle Nagy remains at large.
“Karony lied to investors from all walks of life—including military veterans and hard-working Americans—and defrauded thousands of victims in order to buy mansions, sports cars, and custom trucks,” said United States Attorney Joseph Nocella, Jr.
FBI Assistant Director in Charge James C. Barnacle said the former executive abused his position and betrayed investors’ trust by stealing more than $9 million in cryptocurrency to finance a lavish lifestyle. The proceeds were used to purchase luxury vehicles and real estate, including a $2.2 million home in Utah, additional homes in Kansas, a $277,000 Audi R8 sports car, a Tesla, a custom Ford F-550, and Jeep Gladiator pickup trucks.
IRS-CI New York Special Agent in Charge Harry T. Chavis added that Karony carried out the scheme by exploiting his access to SafeMoon’s liquidity pool while attempting to conceal the transactions, which law enforcement eventually traced, exposing the scheme.
Liquidity Pool Misrepresentations SafeMoon tokens were launched in March 2021 by the firm on a public blockchain, with each transaction automatically subject to a 10% tax that was split into two 5% tranches. One was meant to be reflected to holders in proportion to their holdings, increasing their token balances, while the remaining 5% was designated for its pools to boost market liquidity.
You may also like: US Senate Clears Housing Bill That Also Halts CBDC Push Major Figure in $15 Billion Bitcoin Scam Network Arrested in Tokyo Is Bitcoin (And Peace) In Trouble as Trump Warns Iran of Fresh Strikes? In the months following its debut, SafeMoon attracted millions of customers and reached a market capitalization exceeding $8 billion.
Prosecutors claim that Karony and his partners lied about important details of the company, including false statements that its reserves were locked and could not be used for personal reasons, that tokens would only be used for specific business purposes, that digital asset pairs would be added to the liquidity pool manually when trades occurred on certain exchanges, and that the developers were not using or trading SafeMoon for their own gain.
In reality, they retained access to the liquidity pools and diverted millions of dollars’ worth of crypto for personal enrichment.
In this week’s edition of the weekly recap, Sam Bankman-Fried appeared to implement a documented media playbook from prison, former SafeMoon CEO Braden Karony received a 100-month sentence, and Strategy introduced perpetual preferred shares to fund Bitcoin purchases.
Bankman-Fried executes documented media approach Court records and recent prison communications indicate the convicted FTX founder is implementing a media strategy outlined in a January 15, 2023 Google document created shortly after his arrest. The document detailed 12 tactics Bankman-Fried considered to generate favorable media coverage following his indictment, arrest, extradition, and arraignment. Recent communications show Bankman-Fried shifting politically rightward and praising Trump’s cryptocurrency policies. SafeMoon executive sentenced to prison Former CEO Braden Karony received a 100-month sentence Monday in Brooklyn federal court for stealing millions in customer funds and using them for personal enrichment. A federal jury convicted Karony in May of last year on charges including conspiracy to commit securities fraud, wire fraud, and money laundering. Strategy introduces variable dividend preferred stock The Bitcoin (BTC) treasury company is expanding its use of preferred stock to fund cryptocurrency purchases while reducing exposure to market volatility. CEO Phong Le told Bloomberg in a February 12 interview that the company is offering perpetual preferred shares branded “Stretch” to attract investors seeking digital asset exposure without extreme price fluctuations. The product pays a variable dividend adjusted monthly, providing an alternative financing mechanism for the company’s ongoing Bitcoin accumulation strategy. Grayscale files AAVE ETF application The investment firm reportedly submitted an S-1 application to the Securities and Exchange Commission for an AAVE spot exchange-traded fund according to regulatory filings. The filing follows increased attention to AAVE, a decentralized finance protocol, after a governance vote on decentralizing its operational structure received community support. Kalshi partners with sports insurance broker The prediction market platform announced collaboration with sports insurance broker Game Point Capital and made an entry into the sports insurance market according to CEO Tarek Mansour. The partnership targets the fast-growing sports insurance and reinsurance industry, currently valued at approximately $9 billion annually and projected to double by 2030. Binance launches prepaid card in CIS markets The exchange introduced its prepaid Mastercard crypto card in several Commonwealth of Independent States countries. The card offers instant crypto-to-fiat payments and cashback rewards according to marketing lead Anka Tsintsadze’s Friday confirmation. South Korean police lose custody Bitcoin Gangnam Police Station confirmed Friday that 22 Bitcoin worth approximately ₩2.1 billion (roughly $1.6 million) were lost from police custody. The Bitcoin was voluntarily surrendered by suspects during a 2021 investigation and held in custody since then. Robinhood debuts layer-2 testnet The trading platform launched a public testnet version of its proprietary layer-2 network developed using Arbitrum’s technology stack. Robinhood Chain is currently accessible to a closed group of partners and developers who can experiment with integration, access points, and documentation. Hoskinson clarifies Midnight privacy strategy Cardano founder Charles Hoskinson stated Thursday at Consensus Hong Kong that privacy-focused blockchain Midnight doesn’t plan to recruit Monero and ZCash users, calling them a “different demographic” already caring deeply about privacy. Midnight will instead target “billions of people that don’t know they need privacy” with default privacy protection rather than optional features. BitMine continues Ethereum accumulation The company added 40,613 Ethereum (ETH) valued at approximately $83.2 million to its industry-leading Ethereum holdings last week despite unrealized losses currently sitting near $7.5 billion. Total holdings reached 4,325,738 Ethereum worth over $8.8 billion, representing about 3.58% of circulating ETH supply. Chairman Tom Lee stated “BitMine has been steadily buying Ethereum, as we view this pullback as attractive, given the strengthening fundamentals.” Strategy maintains Bitcoin purchases despite losses Strategy announced Monday it acquired an additional 1,142 Bitcoin last week even as its nearly $50 billion holdings remain underwater following last week’s cryptocurrency market plunge. The firm purchased coins for approximately $90 million total, with a cost basis of $78,815 per Bitcoin.
Analyst: SK Hynix’s US listing and fund-raising could trigger a valuation re-rating.
According to Bloomberg, SK Hynix is set to issue American Depositary Receipts (ADRs) on the Nasdaq on July 10. The listing aims to raise nearly $30 billion, making it one of the largest ADR issuances in history. Market participants widely believe the move will significantly expand its global investor base and may drive a valuation re-rating. Multiple asset management firms project that if its valuation converges with Micron Technology’s, its share price could rise by 30% over the next year. One fund manager noted that SK Hynix should trade at a valuation at least on par with Micron, as demand for memory chips is likely to outpace supply for years to come. The listing comes amid an unusually strong boom in the memory chip sector. Shares of Micron, SK Hynix, and Samsung Electronics have all surged over 200% this year, marking their best annual performance in decades. Demand for High Bandwidth Memory (HBM) from AI servers is widely seen as the driver of a structural "memory supercycle".
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Quick Answer: SafeMoon V2 (SFM) is currently trading around $0.0000027–$0.0000031, with a market cap of approximately $1.6–$1.9M and virtually zero daily trading volume. The original SafeMoon company filed for Chapter 7 bankruptcy in December 2023; CEO John Karony was convicted on all fraud charges in May 2025. The token’s assets were acquired by the VGX Foundation, which continues operating the wallet and technology under new management. SFM remains an extreme high-risk, speculative asset trading over 99.9% below its all-time high. Third-party forecasts for 2026 range from $0.0000139 to $0.001, reflecting the wide uncertainty around the project’s survival.
Key Takeaways SFM is trading ~99.9%+ below its ATH of $0.0034 and has a market cap of just ~$1.6–$1.9M in June 2026 Former CEO John Karony was convicted on securities fraud, wire fraud, and money laundering charges on May 21, 2025; CTO Thomas Smith pleaded guilty in February 2025; founder Kyle Nagy remains at large In December 2023, SafeMoon LLC filed for Chapter 7 bankruptcy after SEC charges; VGX Foundation acquired the assets through a public auction CoinCodex projects SFM reaching ~$0.0000244 by end of 2026 (+76%); BitScreener targets ~$0.000111 for 2026 Daily trading volume is minimal (~$1,600–$3,700), making SFM highly illiquid and vulnerable to extreme volatility The VGX Foundation has committed to token deflation and rebuilding community trust, but execution risk remains very high SFM Price & Market Overview MetricValuePrice (June 2026)~$0.0000027–$0.0000031Market Cap~$1.6–$1.9M24h Volume~$1,600–$3,700All-Time High$0.0034 (January 5, 2022)All-Time Low$0.00000188ATH Drop~99.9%+Circulating Supply~610–614B SFMMax Supply1 Trillion SFMCMC Ranking~#2,600–#6,000 Sources: CoinGecko, CoinMarketCap
What Is SafeMoon (SFM)? SafeMoon launched on March 8, 2021 on the Binance Smart Chain (BNB Chain) as a “fair launch” token — developers burned all their allocated tokens and participated in the public sale alongside regular buyers. The project marketed itself as a DeFi protocol that incentivizes long-term holding through a 10% transaction tax: 5% redistributed to existing holders (reflection mechanism) and 5% directed to a liquidity pool in BNB tokens.
At its peak in April 2021, SafeMoon’s market capitalization exceeded $5.7 billion, driven almost entirely by influencer promotion and viral social media momentum. The token surged over 55,000% between March 12 and April 20, 2021, before plunging ~50% in a single day when the public learned that SafeMoon’s liquidity pool was not locked as claimed.
SafeMoon V2 launched in December 2021 as a token migration at a 1:1000 consolidation ratio, with a maximum supply of 1 trillion SFM. The network subsequently migrated from BNB Chain to the Solana blockchain.
Key products included:
SafeMoon Wallet — a multi-currency crypto wallet SafeMoon Swap — a decentralized exchange SafeMoon Connect — a browser extension and Web3 connection tool SafeMoon’s Legal History: The Fraud Case SafeMoon’s trajectory from 2023 onward was dominated by its fraud case — facts that any investor must understand before considering exposure to SFM:
March 2023: A network upgrade introduced a bug in SafeMoon’s smart contract, compromising the liquidity pool and resulting in the loss of approximately $8.9 million in SFM tokens.
November 2023: The SEC and DOJ simultaneously charged SafeMoon LLC, creator Kyle Nagy, CEO John Karony, and CTO Thomas Smith with conspiracy to commit securities fraud, wire fraud, and money laundering. The SEC alleged misappropriation of over $200 million from the project’s liquidity pool, which executives used for luxury cars, homes, and personal expenses — despite publicly claiming the funds were locked and inaccessible.
December 2023: SafeMoon US LLC filed for Chapter 7 bankruptcy (liquidation). The VGX Foundation subsequently acquired the SafeMoon Wallet, technology, and brand assets through a public bankruptcy auction.
February 2025: CTO Thomas Smith pleaded guilty to conspiracy to commit securities and wire fraud, cooperating as a witness against Karony.
May 21, 2025: CEO John Karony was convicted on all three counts — conspiracy to commit securities fraud, wire fraud, and money laundering — by a federal jury in Brooklyn. Kyle Nagy remains at large.
The FBI continues to seek victims for restitution proceedings.
SafeMoon Under VGX Foundation (2024–2026) Following the bankruptcy, the VGX Foundation acquired SafeMoon’s assets and has been working to rebuild under new management. Key developments:
Commitment to a token deflation program — reducing circulating SFM supply through burns to increase scarcity Continued operation of the SafeMoon Wallet platform Migration to Solana blockchain for faster, cheaper transactions Plans for a decentralized exchange and DeFi products, targeting 2027 Whether VGX Foundation can restore meaningful utility and trust to the SFM token remains deeply uncertain. Trading volumes in 2026 remain near zero on most days, suggesting minimal community engagement.
How Does SFM Compare to Similar High-Risk Tokens? TokenMarket Cap (June 2026)ATH DropKey RiskSafeMoon V2 (SFM)~$1.9M~99.9%Fraud history, near-zero liquidityKishu Inu (KISHU)~$18M~99%+No utility, high supplyShiba Inu (SHIB)Multi-billion~85–90%Meme coin dependencyPEPE~$1–2B~80%+Meme coin, high volatility SFM’s market cap of ~$1.9M places it in the extreme micro-cap tier — smaller than most meaningful DeFi projects by several orders of magnitude. Unlike Kishu Inu (KISHU) or Shiba Inu, SFM carries the additional burden of a completed criminal fraud prosecution and bankruptcy. See our price prediction category for analysis of other high-risk tokens.
SafeMoon Price Prediction 2026 Near-term forecasts for SFM in 2026 must be interpreted in the context of near-zero liquidity — small buy orders can move the price dramatically, making technical models unreliable.
CoinCodex projects SFM reaching approximately $0.0000244 by end of 2026, representing a +76% gain from current levels. Monthly projections show a potential peak near $0.000038 in mid-2026 before consolidation.
BitScreener is more optimistic, projecting SFM trading in a range of $0.000026–$0.000111 for 2026, closing the year near $0.000096–$0.000111.
DigitalCoinPrice projects SFM in a range of $0.0000133–$0.0000155 by end of 2026 — more conservative and closer to current trading levels.
Margex cites Software Testing Help forecasts placing SFM at $0.0082–$0.0093 for 2026 — significantly higher than other platforms and dependent on a major community revival.
WalletInvestor has historically rated SFM as a poor investment with downside risk.
Source2026 Low2026 Average2026 HighCoinCodex~$0.000014~$0.0000244~$0.000038BitScreener$0.000026~$0.000096$0.000111DigitalCoinPrice$0.0000133~$0.0000147$0.0000155Margex/STH$0.0082~$0.0089$0.0093 All figures are third-party estimates. Not investment advice.
SafeMoon Price Prediction 2027 For 2027, forecasts remain highly speculative. Any upside would depend on VGX Foundation executing on its DeFi roadmap and Solana ecosystem momentum.
CoinCodex projects SFM peaking near $0.0000242 in early 2027 before declining to around $0.0000167 by year-end, as post-speculation correction sets in.
DigitalCoinPrice projects SFM in a range of $0.0000182–$0.0000222 for 2027.
BitScreener forecasts $0.00076–$0.00098 for 2027, reflecting a bull case that requires significant exchange relisting and community growth.
Margex projects a maximum of $0.015 and minimum of $0.009 for 2027.
2027 Range (consensus): $0.0000167 – $0.0000242 (base case); higher if VGX roadmap delivers
CoinCodex models SFM in the $0.0000139–$0.0000158 range through most of 2028, with gradual appreciation toward $0.0000157 by year-end.
BitScreener projects a trading range of $0.000026–$0.00075 for 2028.
CoinMarketCap Academy (older model) forecasts SFM reaching $0.002 by 2028 and $0.003 by 2029 — extremely bullish and contingent on full project recovery.
SafeMoon Price Prediction 2030 By 2030, the majority of forecasts assume either gradual appreciation under VGX management or continued irrelevance — with the bear case being near-zero.
CoinCodex projects SFM at approximately $0.0000340 by 2030 (+145% from current levels), reflecting a slow compounding scenario.
BitScreener forecasts a 2030 target of $0.000143–$0.000261, representing a 50–100x from current prices — requiring dramatic improvement in token utility and community.
CoinMarketCap Academy projects a maximum of $0.005 by 2030 under their most optimistic model.
Margex projects SFM trading between $0.002143 and $0.002613 by 2030.
YearLowAverageHighSource2026$0.0000133$0.0000147$0.0000155DigitalCoinPrice2026$0.000026~$0.000096$0.000111BitScreener2027$0.0000182~$0.0000222$0.0000242CoinCodex/DCP2028——$0.002CMC Academy2030$0.000143—$0.000261BitScreener2030$0.002143—$0.002613Margex All predictions are third-party estimates. Not investment advice.
SafeMoon Price Prediction 2040 Long-term forecasts for SFM by 2040 are entirely speculative.
CoinCodex projects SFM reaching approximately $0.000077 by 2040, implying continued slow appreciation but far below prior highs.
BitScreener forecasts $0.000318 by 2040 under a bull scenario.
CoinCodex (SAFEMOON on Solana variant) projects $0.000317 by 2040 and $0.001106 by 2050.
Any 2040 upside scenario requires SFM to survive as a going concern under VGX management, grow genuine utility, and benefit from multiple crypto bull cycles — a long list of conditions given the project’s current micro-cap status and legal baggage.
Where to Buy SafeMoon (SFM) SFM is available on a limited number of platforms due to its micro-cap status and legal history:
Gate.io — Listed with SFM/USDT pair; currently one of the more active markets BitMart — Has listed SFM following VGX Foundation’s acquisition milestones LBank — Listed SFM with small trading volumes Bybit — SFM is tracked on Bybit; verify current trading availability Uniswap / Solana DEXs (Jupiter, Raydium) — SFM is tradeable on Solana DEXs using its contract address; check official SafeMoon/VGX channels for the current verified contract Important: Binance, Coinbase, Kraken, KuCoin, and OKX do not currently list SFM for trading. Always verify the contract address through official channels — fake SFM tokens are common. The FBI is actively seeking SafeMoon fraud victims; if you purchased SFM before 2023 and suffered losses, you may be eligible to participate in restitution proceedings.
Frequently Asked Questions What is SafeMoon (SFM)? SafeMoon V2 (SFM) is a deflationary token originally launched in March 2021 on BNB Chain, featuring a 10% transaction tax for holder redistribution and liquidity generation. The original company filed for Chapter 7 bankruptcy in December 2023 following SEC and DOJ fraud charges. Its assets were acquired by the VGX Foundation, which continues operating the SafeMoon Wallet and token on the Solana blockchain. CEO John Karony was convicted on all fraud charges in May 2025.
What is the SafeMoon price prediction for 2026? Third-party forecasts for SFM in 2026 range widely due to near-zero liquidity. CoinCodex projects ~$0.0000244, DigitalCoinPrice models $0.0000133–$0.0000155, and BitScreener targets up to $0.000111. Margex cites Software Testing Help estimates of up to $0.0093. All models carry extreme uncertainty given SFM's micro-cap status (~$1.9M market cap) and minimal daily volume.
What happened to SafeMoon? SafeMoon's original company (SafeMoon LLC) was charged by the SEC and DOJ in November 2023 with securities fraud, wire fraud, and money laundering. Executives misappropriated over $200 million from the liquidity pool. The company filed for bankruptcy in December 2023. CTO Thomas Smith pleaded guilty in February 2025. CEO John Karony was convicted on all charges in May 2025. The VGX Foundation acquired SafeMoon's assets through a bankruptcy auction and continues operating under new management.
Is SafeMoon a good investment? SafeMoon carries some of the highest risks in the crypto market: a completed criminal fraud prosecution, Chapter 7 bankruptcy, near-zero trading volume (~$1,600/day), a market cap of ~$1.9M, and a price 99.9% below its ATH. While the VGX Foundation represents a new chapter, execution risk is extreme and liquidity is too thin for meaningful position sizing. Investors should treat SFM as a high-risk speculative position and only allocate capital they can afford to lose entirely.
Where can I buy SafeMoon in 2026? SFM is available on Gate.io, BitMart, LBank, and Solana DEXs (Jupiter, Raydium). It is not listed on major exchanges like Binance, Coinbase, or Kraken. Always verify the contract address via official VGX Foundation or SafeMoon channels before purchasing, as copycat tokens are common.
