Braden John Karony Found Guilty in Major Cryptocurrency Fraud Case

In May 2024, a Manhattan federal court concluded a significant trial that has implications for how cryptocurrency executives face accountability. Braden John Karony, the former chief executive of SafeMoon, was convicted on all three felony counts after jury deliberations concluded in less than a day. The verdict marks a pivotal moment in legal precedent surrounding digital asset companies.

The SafeMoon Scheme and Alleged Misconduct

SafeMoon, a cryptocurrency project launched in 2021, became the focus of federal investigation after allegations emerged that its leadership had allegedly diverted and misappropriated millions of dollars in SFM tokens. According to prosecutors, Braden John Karony collaborated with co-defendant Thomas Smith, the platform’s former chief technology officer, to execute the scheme. A third defendant, Kyle Nagy—identified as SafeMoon’s creator—reportedly fled to Russia and remained at large at the time of the verdict.

The charges centered on claims that executives had systematically siphoned off project funds over an extended period, raising serious questions about governance and financial oversight within the cryptocurrency sector. The trial, which began with jury selection on May 5, lasted approximately two weeks before reaching its conclusion.

Three Felony Convictions: A Breakdown

The jury found Braden John Karony guilty on three distinct charges: conspiracy to defraud the United States, wire fraud, and money laundering. These charges carry significant criminal penalties and reflect the severity with which federal prosecutors treated the case. Wire fraud specifically addresses the use of electronic communications to execute deceptive schemes, while the money laundering charge suggests prosecutors alleged attempts to conceal the origins of illegally obtained funds.

Throughout the trial, evidence was presented demonstrating how the alleged scheme unfolded. Thomas Smith, who turned state’s witness, testified against his former colleague Karony, providing crucial testimony that helped secure the conviction.

Implications for Cryptocurrency Regulation

Legal observers have characterized this trial as a bellwether case—a test of how federal prosecutors will handle cryptocurrency fraud allegations going forward. The case took on added significance given that Joseph Nocella, the newly appointed Interim US Attorney for the Eastern District of New York, took office shortly before jury selection began on May 5. Nocella, a recent appointee by former President Donald Trump, now faces pressure to continue prosecuting high-profile digital asset cases effectively.

The Braden John Karony conviction signals that federal authorities are prepared to pursue criminal charges against cryptocurrency executives without hesitation, potentially setting a template for future enforcement actions in the industry. As the cryptocurrency sector continues to mature, cases like this one will likely shape regulatory expectations and executive accountability standards.