Key Takeaways
- A federal jury has convicted SafeMoon CEO Braden John Karony of conspiracy to commit securities fraud, wire fraud, and money laundering.
- SafeMoon CTO Thomas Smith provided key testimony in the trial.
- Smith reached a plea deal with prosecutors in February.
Eighteen months after U.S. authorities filed charges against SafeMoon CEO Braden John Karony, a jury has found him guilty of conspiracy to commit securities fraud, wire fraud and money laundering.
Karony’s fate was sealed after co-defendant and SafeMoon CTO Thomas Smith reached a plea deal with prosecutors and agreed to testify against his former colleague.
SEC Wins SafeMoon Lawsuit
At the heart of the charges against Karoney, Smith and SafeMoon founder Kyle Nagy (described as still “at large” by the SEC) is the allegation that they misled investors and siphoned funds from the token’s liquidity pool (LP).
According to a lawsuit brought by the Department of Justice and the Securities and Exchange Commission (SEC), executives told investors their funds were secure as the LP was locked.
“In reality, Karony and his co-conspirators retained access to the SafeMoon liquidity pools and used that access to intentionally divert and misappropriate millions of dollars’ worth of tokens for their personal benefit,” the agencies said on Wednesday, May 21.
Meanwhile, although SafeMoon executives publicly denied that they personally held or traded the tokens, government lawyers pointed out that they repeatedly bought and sold SafeMoon, often influencing its market price.
SafeMoon CTO Details Embezzlement
While Smith originally denied the SEC’s charges, in February 2025, he reached a deal with prosecutors and withdrew his prior not-guilty plea, presumably in return for a more lenient sentence.
In statements presented as evidence, Karony stated that the LP could be tapped as a “last resort” for operational costs. But in court, Smith testified that “it was used for things that were not emergencies.”
The former SafeMoon CTO said he, Karony, and Nagy “would regularly discuss how we would structure responses to the public” to conceal their withdrawals from the pool.
Thomas Smith’s Regrets
Among the three SafeMoon executives charged with fraud, Smith was with the project for the shortest amount of time, serving as CTO for less than a year.
“Previously to all of that, I had a very strong moral compass,” he told the court on May 8.
“After I had the money, I stopped asking questions […] I became that monster I was talking about,” he added.
