In a significant development within the cryptocurrency world, Braden John Karony, the former CEO of SafeMoon, has been sentenced to 100 months in federal prison after his conviction on numerous fraud charges.
Evidence presented during the trial unveiled a litany of fraudulent activities, including securities fraud, wire fraud, and money laundering.
Karony misled investors by assuring them that the liquidity was secured, while insiders exploited the funds for personal enrichment.
“Karony’s betrayal of trust is egregious. He siphoned over $9 million in cryptocurrency while maintaining the facade of legitimacy,” stated James C. Barnacle, Jr., an FBI assistant director.
The founder of SafeMoon has been sentenced to 100 months in prison
While serving time, the founder of FTX claims the exchange was solvent
— Wendy O (@CryptoWendyO) February 10, 2026
SafeMoon: The Illusion of Security
Analyses highlight that Karony and his associates misrepresented SafeMoon’s liquidity as “locked,” misleading investors into a false sense of security while diverting millions.
Funds raised were reportedly utilized for lavish purchases including luxury cars and real estate. The calculated actions took a heavy toll, particularly affecting small investors and individuals with limited means.
US Attorney Joseph Nocella, Jr. emphasized the gravity of the deceit, stating Karony, “betrayed the trust of everyday Americans, including military personnel and hardworking families.”
SafeMoon’s founder, Braden Karony, faces a lengthy prison sentence.
“This was theft in its purest form. The losses were substantial for each victim. Mr. Karony, your actions warrant a serious sentence,”
— Ariel Givner (@GivnerAriel) February 10, 2026
The Legal Proceedings
The trial, which spanned three weeks in May 2025, resulted in a unanimous verdict of guilty on numerous accounts. Reportedly, sentencing was administered by US District Judge Eric Komitee in New York’s Eastern District.
Following strong recommendations from the Justice Department for a severe sentence, the court responded appropriately. A former executive connected with the case, Thomas Smith, has already pleaded guilty, facing his imminent fate.
Remaining co-founders are still being investigated, and authorities are preparing to recover stolen funds through various legal avenues.
Victimized Investors and Trust Erosion
Investors who were drawn to SafeMoon often did so out of enthusiasm for the project and optimism for innovative investment opportunities. Unfortunately, many learned the hard truth that enticing promotional content can obscure genuine risks.
After the revelations, many investors saw their holdings plummet. A few attempted to trace the path of their funds, only to discover alarming transactions into private bank accounts intended for extravagant expenses. This case has starkly illustrated how trust can be quickly undermined when oversight mechanisms falter.
Restoration Efforts and Future Implications
The court has mandated the forfeiture of about $7.5 million, but the complete extent of losses is still being assessed. Following hearings will focus on restitution for the victimized investors; however, this process tends to be prolonged.
In the broader landscape, US law enforcement is showing renewed determination in pursuing cryptocurrency fraud cases, indicating a likelihood of increased investigations and prosecutions for similar scenarios.
Featured image from John Karony – Medium, chart from TradingView
