Safemoon Exec Found Guilty in NY Court—Another Crypto ’Safe’ Bet Goes South

Another day, another crypto executive learning that ’decentralized’ doesn’t mean ’above the law.’ A New York jury just slammed the book on Safemoon’s former bigwig, convicting them on all charges—details still emerging, but the irony isn’t lost on anyone who watched SFM’s 2021 hype train derail.

Remember when ’Safemoon’ was the meme-coin darling? Neither do most bagholders. This verdict’s just the latest reminder that in crypto, the only thing growing faster than tokenomics jargon is the SEC’s enforcement docket.

While decentralized purists scream overreach, traditional finance folks are too busy sipping champagne—another ’web3 innovator’ just got schooled on why financial regulations exist. The takeaway? DYOR applies to legal risks too, folks.

• The ex-Safemoon executives were charged with defrauding investors through unscrupulous smart contracts.

• SFM price dropped over 5 percent today despite the wider altcoin market following Bitcoin in bullish sentiment.

A New York jury convicted Braden John Karony, a former CEO of the SafeMoon (SFM) crypto project, on all crucial charges earlier on Wednesday, May 21. Karony was charged by the United States Department of Justice (DOJ) with conspiracy to commit securities fraud, wire fraud, and money laundering.

The verdict was a result of a two-week trial that concluded that the ex-Safemoon executives defrauded SFM investors by draining purportedly locked liquidity for their personal gains. The case prosecutor alleged that Karony alongside Thomas Smith, a former Safemoon CTO, and Kyle Nagy, the project’s creator, misappropriated millions of investors’ funds between 2021 and 2022. 

While Smith has already pleaded guilty to all charges and testified against Karony, Nagy remains a fugitive, allegedly in Russia. Meanwhile, Karony will remain in police custody ahead of his sentencing, with his properties worth over $1.8 million seized.

Market Impact on the Safemoon Project

The Safemoon project has struggled to regain market share in the recent past following the indictment of the ex-officials. The project dropped in net valuation from nearly $1 billion to about $7.5 million at the time of this writing, according to our latest crypto oracle.

Following the announcement on Wednesday, SFM price dropped over 4 percent in the past 24 hours to trade about $0.00002 during the late North American trading session. 

The Safemoon project has recorded sustained bearish sentiment in the recent past despite the wider altcoin market attempting to follow Bitcoin price in bullish sentiment. Furthermore, BTC price rallied over 4 percent in the past 24 hours to trade at about $109k, while the BNB and Dogecoin led in the wider altcoin recovery.