In a recent announcement posted on the U.S. Department of Justice (DOJ) website on November 1, 2023, three CEOs of Safemoon (SFM), Braden John Karony, Kyle Nagy, and Thomas Smith, have been charged and arrested. Two out of the three Safemoon founders, Braden John Karony and Thomas Smith, have been apprehended, while Kyle Nagy remains at large.
The arrest warrants were issued based on allegations that all three individuals committed securities fraud, wire fraud conspiracy, and money laundering. The announcement specifies that Karony was arrested in Provo, Utah, Smith was apprehended in Bethlehem, New Hampshire, while Nagy is currently evading law enforcement.
On the same day as the arrests of two Safemoon founders, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Safemoon and its executives for orchestrating a large-scale fraudulent scheme that caused investors to suffer billions of dollars in losses. The indictment highlights that the defendants misled investors in SFM (Safemoon’s cryptocurrency) regarding their ability to access SFM’s heavily locked liquidity and their personal holdings and trading of SFM. As a result, the DOJ alleges that these defendants deceived and misappropriated millions of dollars’ worth of SFM liquidity for personal benefits, such as purchasing luxury cars, real estate, and personal investments.
Furthermore, the DOJ emphasizes that prior to the arrests of Safemoon’s leadership, they employed complex trading route strategies and multiple accounts on various centralized exchanges to conceal their activities.
The SafeMoon project was launched in March 2021. According to Coinmarketcap data, during its peak, the price of SafeMoon reached $0.00338272 USD in January 2022. However, following the news of the arrests of two Safemoon founders, the price plummeted to $0.00019274 USD, representing a loss of over 60% of its value.