SafeMoon’s former Chief Technology Officer, Thomas Smith, has pleaded guilty to fraud charges. He admitted to misleading investors about the project’s liquidity pool.
In a February 20 court appearance, Smith withdrew his previous not-guilty plea. He pleaded guilty to securities fraud conspiracy and wire fraud conspiracy. Prosecutors say he and other executives had full access to SafeMoon’s liquidity pool. They allegedly withdrew over $200 million for personal use.
Judge Cheryl Pollak has recommended that U.S. District Judge Eric Komitee accept the plea. If approved, Smith could face up to 20 years for wire fraud conspiracy. He could also receive up to 25 years for securities fraud conspiracy.
SafeMoon Executives Accused of Misleading Investors
The U.S. Department of Justice and the Securities and Exchange Commission charged Smith in November 2023. SafeMoon’s CEO, Braden John Karony, and creator, Kyle Nagy, were also charged.
The executives promoted SafeMoon as a secure investment. They claimed its liquidity pool was locked and inaccessible. Prosecutors say this was false. They allege that insiders withdrew funds and used them for luxury cars, real estate, and other personal expenses.
The team also engaged in wash trading. This market manipulation tactic inflated SafeMoon’s market cap. At its peak, the token reached $8 billion. The price later collapsed, leaving investors with heavy losses.
Karony Awaits Trial, Nagy Remains Missing
Authorities arrested Smith and Karony in November 2023. Nagy remains at large. Reports suggest he has resurfaced in Russia.
Karony has pleaded not guilty. He previously tried to have the charges dismissed. His request for a trial delay was denied. Opening statements in his case are set for April 7.
Smith’s guilty plea could impact the upcoming trial. Prosecutors will likely use his admission as evidence against the remaining defendants.
