Last updated on February 26th, 2026 at 04:40 pm
Braden John Karony, the former CEO of digital asset company SafeMoon US LLC, was sentenced to 100 months in prison on Tuesday, February 10, 2026, for his role in a massive cryptocurrency fraud scheme.
United States District Judge Eric Komitee handed down the sentence in a Brooklyn federal court following Karony’s conviction on conspiracy to commit securities fraud, wire fraud, and money laundering. As part of the judgment, Karony must forfeit approximately $7.5 million and two residential properties, with victim restitution to be determined at a later date.
Deceptive liquidity pools and luxury spending: the heart of the scam
Prosecutors revealed that Karony and his co-conspirators misled thousands of investors by claiming that SafeMoon’s liquidity pools were “locked” and inaccessible to insiders.
These pools were supposed to be funded by a 10% tax on every transaction, intended to provide stability and safety for the token, which once reached a market capitalisation of $8 billion. In reality, the executives retained access to the funds and used them as a personal bank account to finance a lavish lifestyle.
Evidence presented during the three-week trial showed that Karony misappropriated over $9 million in crypto assets. The illicit proceeds were used to purchase a $2.2 million home in Utah, luxury vehicles including an Audi R8 and a custom Ford F-550, and other high-end real estate. To hide the trail, Karony employed a “labyrinth” of private unhosted wallets and complex transaction routing across various exchanges.
A warning to the Web3 industry: accountability in decentralized finance
United States Attorney Joseph Nocella says this serves as a warning against financial crimes involving digital assets.
The case highlights the danger of centralized control in projects marketed as decentralized. While CTO Thomas Smith pleaded guilty, founder Kyle Nagy is at large. The sentencing follows SafeMoon’s Chapter 7 bankruptcy filing in late 2023. This mirrors past high-profile failures, such as Daren Li, a fugitive mastermind, who was sentenced in absentia to 20 years for a $73 million crypto money-laundering syndicate.
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