Ex-SafeMoon CEO Braden Karony sentenced to over 8 years for defrauding investors of $200M, highlighting crypto fraud risks.
Author: Arushi Garg
Steady attention without excessive speculation.
12th February, 2026 – Ex-SafeMoon CEO Braden Karony sentenced to 8 years for crypto fraud for defrauding investors of more than $200 million. He was found guilty of manipulating trades and using funds for luxury expenses, highlighting the growing crackdown on dishonest DeFi projects.
High Signal Summary For A Quick Glance
Braden John Karony, Ex-SafeMoon CEO of SafeMoon, was sentenced to over 8 years in prison for running a multi-year fraud. SafeMoon, launched in 2021 as a DeFi token with “locked” liquidity and a 10% transaction tax, surged to an $8 billion market cap but collapsed after it was revealed liquidity wasn’t truly locked. Investors faced lawsuits, a $9M hack, and the project went bankrupt by 2023.
Federal charges accused Karony of siphoning $200M for personal luxuries and manipulating prices. The case sparked widespread Crypto Twitter discussion, destroyed 99% of SafeMoon’s token value, and added to distrust in meme coins, mirroring broader crypto scandals like FTX and Bitconnect, and contributing to market volatility and increased regulatory scrutiny.
Key milestones in SafeMoon’s rise, collapse, and criminal prosecution
SafeMoon launches on BNB Chain with a 10% transaction tax designed to reward holders and build liquidity.
The token rallies more than 23,000% amid celebrity endorsements and viral hype, briefly reaching a multi-billion-dollar market cap.
Disclosure that SafeMoon’s liquidity pool was not fully locked triggers a sharp 50% price drop and early investor skepticism.
Investors file a lawsuit alleging SafeMoon functioned as a pump-and-dump scheme involving executives and promoters.
Blockchain investigator Coffeezilla accuses the team of siphoning millions from the liquidity pool for personal use.
A smart-contract exploit drains roughly $9M from SafeMoon’s liquidity pool, with most funds later returned after negotiations.
U.S. authorities charge CEO Braden Karony, Kyle Nagy, and Thomas Smith with securities fraud, wire fraud, and money laundering.
SafeMoon files for Chapter 7 bankruptcy as legal pressure mounts and the token’s value collapses.
Former CTO Thomas Smith pleads guilty to conspiracy charges related to the SafeMoon fraud scheme.
A federal jury finds CEO Braden Karony guilty on all counts following a three-week criminal trial.
Karony is sentenced to 100 months in federal prison, along with restitution, forfeiture, and bans from corporate leadership roles.
While Ex-SafeMoon Braden Karony’s sentencing drew attention, Ex-SafeMoon co-creator Kyle Nagy remains a fugitive since the 2023 indictments. This highlights the challenges of prosecuting international crypto scams, with Nagy likely hiding in undisclosed locations. Thomas Smith’s pending sentencing could reveal more about the fraud.
Victim restitution is still uncertain: Karony must forfeit $7.5M and two properties, but full compensation for defrauded investors depends on SafeMoon’s 2023 bankruptcy and asset liquidation. Speculation over Karony’s appeal remains, as his sentence was below guidelines, possibly due to mitigating factors. These gaps show how crypto justice is slow, affecting investor trust.
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