SafeMoon CTO Pleads Guilty to $200M Fraud
Date: 2025-02-24 Author: Oliver Abernathy Categories: BUSINESS
SafeMoon CTO Thomas Smith has changed his plea and pleaded guilty in a Brooklyn Federal Court case. According to court documents, he appeared before Magistrate Judge Cheryl Pollack and retracted his initial plea of not guilty. Smith admitted to intentionally misleading investors by claiming that SafeMoon’s liquidity pool was locked and unavailable to the project team when in fact he had access to it.
Investigators found that Smith, along with Braden CEO John Karony and project founder Kyle Nagy, used investor funds for personal use, including purchasing luxury real estate and luxury cars. Following his change of plea, Judge Pollack recommended District Judge Eric Comiti accept the guilty plea.
Smith faces up to 20 years in prison for wire fraud and another 25 years for violating securities laws.
Earlier, in November 2023, the US Securities and Exchange Commission (SEC) brought charges against SafeMoon management for defrauding investors and manipulating the market. According to the regulator, the project team artificially inflated the market capitalization of the SafeMoon token (SFM), bringing it to $8 billion, but then the token's value fell sharply, leading to significant financial losses for investors.
After the charges were brought, Smith and Caroni were detained, while Nagy remains at large. Unlike Smith, Caroni continues to deny his guilt and previously tried to have the charges dropped. However, his motion to delay the trial was denied, and now the trial will continue, with an opening statement before the jury scheduled for April 7.
SafeMoon is not the only major crypto revelation. In December, the former head of crypto lending platform Celsius, Alex Mashinsky, also pleaded guilty to fraud and market manipulation. He faces up to 30 years in prison, but agreed not to contest the sentence.
