US Federal Judge Hands 8-Year Prison Term to Safemoon CEO

Asset Forfeiture and Victim Restitution

A U.S. court has sentenced the CEO of Safemoon, the defunct digital asset firm, Braden John Karony, to 100 months in federal prison. The sentence, handed down by District Judge Eric Komitee, follows Karony’s conviction for orchestrating a scheme to defraud investors in the decentralized finance ( DeFi) token Safemoon.

In addition to the prison term, Karony was ordered to forfeit approximately $7.5 million and two residential properties. The court will determine the final amount of victim restitution at a later date.

Karony’s sentencing came months after his three-week trial in May 2025, where a federal jury found him guilty of conspiracy to commit securities fraud, wire fraud and money laundering. As reported by Bitcoin.com News and other media platforms, U.S. prosecutors proved that Karony diverted more than $9 million in investor funds from Safemoon’s liquidity pools to bankroll an extravagant lifestyle.

Among the purchases cited in court were a $2.2 million mansion in Utah, high-end sports cars, including an Audi R8 and a Tesla and several custom trucks.

“Karony lied to investors from all walks of life—including military veterans and hardworking Americans—and defrauded thousands of victims in order to buy mansions, sports cars, and custom trucks,” stated United States Attorney Joseph Nocella, Jr.

Safemoon gained notoriety in early 2021, reaching a market capitalization of over $8 billion. The token utilized a unique “ smart contract” that applied a 10% tax on every transaction. Investors were told this tax was split, with 5% distributed to existing holders to increase their stakes and 5% deposited into “locked” liquidity pools to ensure market stability.

Fabricated Liquidity and Insider Trading

However, the “locked” status was a fabrication. Karony and his co-conspirators retained access to these pools, using complex transaction routing and un-hosted wallets to mask the theft of millions. While publicly denying they traded the token, the defendants frequently sold Safemoon at its peak for personal profit. One of the co-conspirators, Thomas Smith, pleaded guilty to charges brought against him back in February 2025.

According to a United States Attorney’s Office press release, the investigation involved a multi-agency effort, including the FBI, IRS-CI, and Homeland Security Investigations (HSI).

“The expertise of IRS-CI special agents in tracing financial transactions outmatched Karony’s intricate schemes,” said IRS-CI Special Agent in Charge Harry T. Chavis, Jr. “His game of hide-and-seek failed, and now he must face justice.”

HSI Acting Special Agent in Charge Michael Alfonso echoed the sentiment, noting that the scheme exploited the faith of over a million victims. “HSI New York… will continue to work tirelessly to ensure those who exploit the trust of investors—whether through fiat or cryptocurrency—will face justice.”

FAQ ❓

• Who is Braden John Karony? Karony is the former CEO of Safemoon, convicted of defrauding investors in the DeFi token.
• What sentence did he receive? A U.S. court handed him 100 months in federal prison plus forfeiture of $7.5M and two homes.
• How did he defraud investors? Karony diverted over $9M from Safemoon’s liquidity pools to fund mansions, cars, and luxury spending.
• What was Safemoon’s impact? At its 2021 peak, Safemoon hit an $8B market cap before collapsing amid fraud revelations.