U.S. Attorney Breon Peace announced that the founders and executives of SafeMoon LLC have been indicted on multiple counts of conspiracy.
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Federal authorities in the Eastern District of New York have charged founders and executives of SafeMoon LLC with multiple counts of conspiracy, including securities fraud and wire fraud, according to an indictment unsealed Wednesday.
The digital assets company led by Braden John Karony, Kyle Nagy and Thomas Smith is accused of embezzling millions of dollars in investor funds, allegedly for personal use, including the purchase of luxury vehicles and real estate.
“As alleged, the defendants intentionally misled investors and diverted millions of dollars to further their greedy scheme and enrich themselves through the purchase of a custom Porsche sports car, other luxury vehicles and real estate,” said U.S. Attorney Breon Peace.
Decentralized finance digital asset SafeMoon had promised users “locked” liquidity, a feature said to protect investors’ assets. According to the indictment, Karony, Nagy and Smith allegedly diverted these supposedly protected funds for their personal benefit even as SafeMoon’s market capitalization grew to over $8 billion.
“While this fraud scheme may be complex, the end result is simple: theft. Investors were assured that their money was safe, while the defendants allegedly misled investors and diverted millions of dollars to line their pockets and driveways,” said IRS Special Agent in Charge Thomas Fattorusso.
Karony was arrested Wednesday in Provo, Utah, and Smith was arrested in Bethlehem, New Hampshire, while Nagy remains at large. The indictment alleges that, contrary to public statements, the defendants maintained control of the “locked” SafeMoon liquidity pools and systematically diverted funds for their personal benefit. Additionally, the defendants are accused of using private crypto wallet addresses and pseudonymous accounts to conceal their fraudulent activities.
The charges are allegations only and the defendants are presumed innocent until proven guilty. The case is being handled by the Office’s Corporate and Securities Fraud Section.
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