SafeMoon Executives Indicted: Alleged Fraud Scheme Unveiled in $8B Crypto Scandal

Bits Logics Team . 01st Nov 2023
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  • U.S. prosecutors announced that an indictment was unsealed today in federal court charging founders and executives of SafeMoon.
  • Defendants allegedly lied to SFM investors concerning whether SFM’s use of ‘locked’ liquidity was inaccessible.
  • Defendants “fraudulently diverted and misappropriated millions of dollars worth of purportedly “locked” SFM  for personal benefit.

U.S. Attorney’s Office, Eastern District of New York announced that an indictment was unsealed today in federal court in Brooklyn charging Braden John Karony, Kyle Nagy, and Thomas Smith with conspiracy to “commit securities fraud, conspiracy to commit wire fraud and money laundering conspiracy.” The charge was made for their roles in defrauding investors in a decentralized finance digital asset called “SafeMoon” (SFM) issued by their company SafeMoon LLC.  

According to the press release, these individuals allegedly lied to SFM investors concerning whether SFM’s use of ‘locked’ liquidity was inaccessible to the defendants, as well as their personal holding and trading of SFM. Apparently, after SFM’s market cap crossed $8 billion, the defendants “fraudulently diverted and misappropriated millions of dollars’ worth of purportedly “locked” SFM liquidity for their personal benefit.” 

So far, Karony and Smith have been arrested; meanwhile, Nagy has still not been arrested. Elaborating on the crimes of these defendants, United States Attorney Peace, explained:

“As alleged, the defendants deliberately misled investors and diverted millions of dollars to fuel their greedy scheme and enrich themselves by purchasing a custom Porsche sports car, other luxury vehicles and real estate.”

Peace also promised the community that their “Office” will continue to focus on the alleged defendants and guarantees to bring justice for investors in the digital asset industry. Furthermore, Mr. Peace also thanked the US Securities and Exchange Commission for its assistance with the case. One of the ways through which the prosecutors were able to investigate this “fraud scheme” was through cryptocurrency and “good old-fashioned police work”