🌎 Ex-SafeMoon CTO Pleads Guilty to Fraud

Former SafeMoon CTO Pleads Guilty to Securities and Wire Fraud Conspiracy

Thomas Smith, the former chief technology officer of cryptocurrency firm SafeMoon, has pleaded guilty to securities fraud conspiracy and wire fraud conspiracy in connection with a multimillion-dollar scheme that allegedly defrauded investors of over $200 million.

Allegations and Charges

According to court filings, Smith admitted to misleading investors about the status of SafeMoon’s liquidity pool, falsely claiming it was locked and inaccessible. Prosecutors allege that Smith, along with CEO Braden John Karony and creator Kyle Nagy, diverted client funds for personal use, engaging in securities fraud and wire fraud.

The trio was accused of conspiring to deceive investors by marketing the SafeMoon token (SFM) as a secure investment, despite it being an unregistered crypto asset security. They allegedly retained full access to the liquidity pool and siphoned off more than $200 million in investor funds, using them for personal gain, including luxury cars, expensive real estate, and other high-end purchases.

Wash Trading and Market Manipulation

The executives were also accused of engaging in wash trading, a deceptive tactic where the same asset is bought and sold simultaneously to create misleading market activity. This allowed them to inflate the token’s market cap to as high as $8 billion at its peak, which later crashed, leaving thousands of investors with significant losses.

Arrests and Upcoming Trial

Smith and Karony were arrested shortly after the charges were filed, while Nagy remains at large. Karony has pleaded not guilty to all charges and previously attempted to have them dismissed. His request for a trial delay was recently denied, and opening statements are set to begin on April 7.

Potential Sentencing and Cooperation

If accepted, Smith faces a maximum sentence of 20 years for wire fraud conspiracy and up to 25 years for securities fraud conspiracy. The sentencing decision now rests with Judge Eric Komitee, who will weigh the severity of the offenses and Smith’s cooperation in the ongoing investigation.