The legal troubles surrounding the cryptocurrency firm SafeMoon took center stage recently as its former CEO, Braden John Karony, asserted his innocence at the start of his criminal trial in New York. The trial, which has been somewhat overshadowed by other high-profile crypto cases, commenced against a backdrop of serious allegations involving fraud and misappropriation of funds.
On May 6, following court proceedings, Karony took to social media to publicly declare that he had not committed fraud, responding to widespread media coverage surrounding the trial. Along with Karony, SafeMoon’s creator Kyle Nagy and former chief technology officer Thomas Smith have also been charged with allegedly misappropriating millions of dollars from the company’s SFM token.
According to reports from the U.S. District Court for the Eastern District of New York (EDNY), Karony has attempted to shift some of the blame onto Nagy, who is believed to have fled to Russia following the filing of charges. During the first day of the trial, after the jury selection process, Thomas Smith appeared as a witness for the prosecution alongside victims of the alleged fraud.
The trial is expected to last until May 26 and has attracted notably less media attention compared to other recent cryptocurrency-related prosecutions, such as the case against former FTX CEO Sam Bankman-Fried. Karony stands accused of conspiracies involving securities fraud, wire fraud, and money laundering, having maintained his not guilty plea. Since February 2024, he has been released on a bond amounting to $3 million.
It is worth noting that many individuals from the cryptocurrency sector facing criminal charges often refrain from making public statements until their cases are concluded, likely adhering to legal counsel’s advice. Such pre-emptive comments can sometimes be used as evidence during trials.
Political Context Surrounding the Case
The charges against Karony were filed in November 2023, amidst significant political developments, including the appointment of Joseph Nocella as the interim U.S. Attorney for EDNY. This particular court district has previously handled similar cases involving crypto-related fraud allegations, raising questions about the intersection of politics and law enforcement in cryptocurrency cases, especially given Trump’s historical alignment with the industry.
Meanwhile, Alex Mashinsky, former CEO of Celsius, is also gearing up for a significant court appearance with sentencing scheduled for May 8, after having pleaded guilty to felony charges last December.
