Former SafeMoon CEO Braden Karony’s conviction marks the collapse of SafeMoon, once a DeFi darling, now a cautionary tale of crypto fraud. Found guilty of securities fraud, wire fraud, and money laundering, Karony faces a potential 45-year sentence. This article delves into the SafeMoon scandal and its lasting impact on the blockchain industry.
A Fraudulent Facade Exposed
Price fluctuation of SafeMoon’s SFM token, screenshot from CoinMarketCap at 03 PM on May 22, 2025.
Former SafeMoon CEO Braden Karony was convicted on all counts in a U.S. federal court for orchestrating a scheme that defrauded investors of millions. U.S. Attorney Joseph Nocella Jr. stated that SafeMoon, far from its “safe” branding, was a deceptive mirage for trusting investors misled by Karony’s promises. Launched in 2021, SafeMoon hyped its token as a revolutionary profit-sharing model, imposing a 10% transaction fee—half allegedly redistributed to holders, half locked in a liquidity pool for trading stability.
The U.S. Department of Justice revealed this was a sophisticated cover for crypto fraud. Karony and his associates retained access to the liquidity pool, siphoning millions for personal use, contradicting claims of a secure blockchain industry investment. The SafeMoon scandal unraveled investor trust, contributing to broader concerns about fraud in digital assets.
Profiting from Deception
Former SafeMoon CEO Karony, despite denying holding or trading SafeMoon tokens, repeatedly bought and sold them for profit, especially at peak prices, netting over $9 million. These illicit gains funded luxury purchases, including a $2.2 million Utah home, Audi R8s, a Tesla, and custom trucks. To conceal his actions, Karony used pseudonymous wallets and unhosted exchange accounts, complicating efforts to trace the funds.
Among his co-conspirators, Thomas Smith pleaded guilty and awaits sentencing, while Kyle Nagy, a SafeMoon co-founder, remains at large, reportedly fleeing to Russia. The FBI, IRS, Homeland Security Investigations, and SEC spearheaded the probe, exposing the depth of the SafeMoon scandal.
SafeMoon’s Fall and Rebranding
Former SafeMoon CEO Karony’s actions led to SafeMoon’s bankruptcy in December 2023, with VGX Foundation taking over. Once valued at $8 billion, SafeMoon’s token, SFM, has sharply declined. It now holds a $7.2 million market cap. Its daily trading volume has fallen below $1 million, according to CoinGecko. In February 2025, SafeMoon made a drastic shift. It pivoted to a Solana-based memecoin, abandoning its DeFi roots. It also left behind its development team and original roadmap. As a result, it became a community-driven token with no long-term vision.
Online sentiment reflects disillusionment, with investors lamenting losses and criticizing the blockchain industry’s vulnerability to scams. Some X posts express hope for SFM’s memecoin revival, but skepticism prevails.
Conclusion
Former SafeMoon CEO Braden Karony’s conviction for crypto fraud seals SafeMoon’s downfall, from a $8 billion peak to a $7.2 million shadow. Facing up to 45 years, Karony’s SafeMoon scandal highlights risks in the blockchain industry. As SafeMoon rebrands as a memecoin, the crypto fraud legacy underscores the need for vigilance in digital asset investments.