SafeMoon LLC’s Chief Technology Officer (CTO), Thomas Smith, pleaded guilty to two criminal charges related to the SafeMoon token fraud scheme, according to a court filing on Thursday.
The charges, which include securities fraud conspiracy and wire fraud conspiracy, stem from an investigation into the company’s alleged misappropriation of investor funds.
SafeMoon CTO Thomas Smith Reverses Original Plea According to reports, Smith agreed to plead guilty to securities fraud conspiracy and wire fraud conspiracy, reversing his 2023 decision to plead not guilty to both charges. Smith, initially indicted in November 2023 alongside SafeMoon co-founder Kyle Nagy and CEO Braden John Karony, now faces charges of securities fraud conspiracy and wire fraud conspiracy.
The indictment also accused the executives of money laundering.
According to the U.S. Department of Justice, the defendants misled investors by claiming that SafeMoon’s liquidity pools were locked to prevent a “rug pull.”
However, prosecutors say they retained access to the funds and diverted millions of dollars for personal use.
SafeMoon Executives Under Legal Scrutiny for Fraudulent Scheme Nagy, Karony, and Smith allegedly concealed the origin of misappropriated funds through unhosted crypto wallets, complex transaction routing, and pseudonymous centralized exchange accounts.
Authorities claim the trio used proceeds from the fraudulent scheme to finance extravagant purchases, including luxury cars and real estate.
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