SafeMoon CTO Pleads Guilty in $200 Million Crypto Fraud Case

BROOKLYN, NY, February 21, 2025 — Thomas Smith, Chief Technology Officer of SafeMoon LLC, pleaded guilty yesterday to securities fraud conspiracy and wire fraud conspiracy in a Brooklyn federal court, admitting to a scheme that misappropriated over $200 million in investor funds.

The plea, filed on February 20, 2025, before Magistrate Judge Cheryl Pollak, carries potential sentences of up to 25 and 20 years, respectively, exposing a major cryptocurrency scandal detailed in a recent Cointelegraph report.

Smith, alongside SafeMoon CEO Braden John Karony and creator Kyle Nagy, faced charges in November 2023 from the U.S. Justice Department and SEC for misleading investors about the SafeMoon token’s liquidity.

Prosecutors allege the trio diverted funds for luxury purchases, like McClaren cars and lavish homes, causing massive investor losses after the token’s market cap, once peaking between $5.7 billion and $8 billion, crashed nearly 50% on April 20, 2021, as noted in the SEC’s press release.

Karony, who pleaded not guilty, awaits trial on April 7, 2025, while Nagy remains at large, reportedly in Russia. The SEC highlighted market manipulation tactics, including wash trading, used to prop up prices. The case, overseen by Judge Eric Komitee, marks a significant moment in regulatory efforts to tackle crypto fraud.

The crypto community on X is buzzing with reactions to the SafeMoon fraud case. One user highlighted the scandal’s fallout, pointing to executive deceit and investor losses:

This reaction reflects widespread shock and reinforces earlier warnings from investigators like Coffeezilla about risks in the crypto space.