A Provo man who, as the CEO of cryptocurrency company SafeMoon, promised to take investors “to the moon,” was convicted this week on three counts of fraud and money laundering.
Brandon “John” Karony knowingly and repeatedly lied to investors about SafeMoon’s so-called “liquidity pool” and pocketed over $9 million for his “personal benefit,” a jury in New York found Wednesday.
The jury deliberated for roughly two hours, according to reporting from Law360 in New York, and found Karony guilty on all charges. It also determined that 100% of the money used to buy two properties in Utah was “derived from the proceeds” of the fraud, according to court documents.
Karony’s attorney did not immediately respond to a request for comment.
SafeMoon took the cryptocurrency world by storm. In its first month — from March to April 2021 — SafeMoon’s market value grew to more than $5.7 billion. It would eventually grow to $8 billion, according to court documents.
SafeMoon sold a model based on a “liquidity pool,” which would withhold 10% of buyers’ tokens for at least four years to ensure their long-term viability, prosecutors said Karony and his co-executives promised. The liquidity pool would grow and buyers would get rich.
Karony, Chief Technology Officer Thomas Smith, and founder Kyle Nagy assured buyers that the liquidity pool was locked, so no one — not even the executives — could access it, according to court documents.
Instead, the trio stole more than $40 million from the pool, according to allegations in court documents, and bought houses, luxury cars and lavish vacations.
“As proven at trial, the SafeMoon digital asset was anything but safe and turned out to be pie in the sky for investors who were deliberately misled by Karony, a man who sought to get rich quick by stealing and diverting millions of dollars,” U.S. Attorney Joseph Nocella said in a news release.
(Screenshot from Facebook) SafeMoon touted its model, which taxed any exchanges at 10% and held those funds in a purportedly locked pool, as a way to preserve and grow investment funds.
Smith has pled guilty to wire fraud and securities fraud, according to the Department of Justice. Nagy fled the country and is still at large. The company filed for bankruptcy in December 2023.
Karony was convicted Wednesday of conspiring to commit securities fraud, wire fraud and money laundering. He could spend up to 45 years in prison.
“The defendant will soon be trading his sprawling real estate and luxury vehicles,” said Darren McCormack, a Homeland Security Investigations special agent, “for a jail cell within the four walls of a federal penitentiary.”
Shannon Sollitt is a Report for America corps member covering business accountability and sustainability for The Salt Lake Tribune. Your donation to match our RFA grant helps keep her writing stories like this one; please consider making a tax-deductible gift of any amount today by clicking here.
