SafeMoon CTO Admits Guilt in $200M Crypto Fraud Case

• SafeMoon CTO has pleaded guilty to allegations that he took part in a $200 million crypto scheme
• Karony’s request to dismiss the charges was denied, and his trial will begin on April 7.

Thomas Smith, CTO of the then crypto firm SafeMoon, has pleaded guilty to fraud charges. He took part in a scheme that deceived investors and caused losses of over $200 million.

The U.S Department of Justice and SEC have been actively fighting crypto fraud. On the 1st November, the SEC accused CEO Braden John Karony, Founder Kyle Nagy, and CTO Thomas Smith of fraud, conspiracy, and money laundering related to SafeMoon. 

The agency stated that the token was sold as unregistered crypto securities. The three misused their positions as founder, CEO, and CTO to boost SafeMoon’s value to $5.7 billion showing fake trades, false marketing, and lied about how long liquidity would remain locked.

According to the SEC, SafeMoon’s leaders assured investors the token was “Safe to the moon” while they secretly took out $200 million for their personal luxuries like luxury cars and property.

Between March and April 2021, the value of the asset soared by more than 55,000% before dropping by half later on. Investors later realized the team had spread false claims about the liquidity pool lock and had misused funds they insisted were secure.

SafeMoon’s CTO Admits Guilt in Crypto Scam

During a recent court session with Magistrate Judge Cheryl Pollak, Smith changed his original plea from not guilty to guilty on both counts. Judge Pollak advised U.S. District Judge Eric Komitee, who is handling the case, to approve the new plea.

If the plea is confirmed, Smith could receive up to 20 years for wire fraud conspiracy and also a probable sentence of 25 years for securities fraud conspiracy. Judge Komitee will now determine the final sentence based on the seriousness of the crimes and Smith’s cooperation in the investigation.

Karony on the other hand, has denied all accusations and earlier tried to have them dropped. His attempt to postpone the trial was rejected, and his case is scheduled to start with opening statements on April 7.

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