Braden John Karony, Kyle Nagy, and Thomas Smith have been charged with conspiracy to commit securities fraud, conspiracy to commit wire fraud, and money laundering, all linked to their roles with the SafeMoon cryptocurrency project.
The criminal complaint claims that the defendants and their business, SafeMoon US LLC, lied to investors about what ‘locked’ liquidity meant and then used the money from investors to buy things like a Porsche 911 and real estate.
SafeMoon marketed itself by emphasizing that it was unable to engage in a ‘rug pull’ due to the way it ‘locked’ its liquidity. However, these promises were never accurate, and Smith maintained control over the project’s liquidity pools.
Furthermore, despite claiming they didn’t hold any SafeMoon tokens for personal use, Karony and Smith personally discussed trading strategies to profit, with Karony at one point suggesting to Smith they begin selling from their deployer wallet. Smith warned Karony they would need to be cautious about how they reintegrated the funds because they needed to “be weary [sic] of bank accounts reporting to IRS on 9k deposits with a certain period” because if they were not cautious, “IRS would be heavy into audits if we did 9k regularly.”
Allegedly, after Nagy was able to transfer a large quantity of the token to Smith, and Smith was able to successfully convert it to another cryptocurrency, they celebrated, with Smith saying, “IT’S FUCKING GO TIME” and discussing how they could purchase luxury vehicles.
A separate portion of their scheme involved a cryptocurrency exchange that agreed to help distribute rewards to SafeMoon holders. At one point, Karony received $8 million in stablecoins from the exchange to swap into the SafeMoon token and deposit into the liquidity pool; however, he allegedly transferred $1.5 million to the exchange and then withdrew $1.4 million in fiat to his personal bank account.
Karony and Smith have been arrested; Nagy has currently not been arrested.