SafeMoon Price Collapse Deepens as Founder Karony Faces Fraud Conviction

The cryptocurrency community has witnessed another significant legal setback in the SafeMoon ecosystem. On Wednesday, May 21, a New York jury rendered a guilty verdict against Braden John Karony, the former CEO of SafeMoon (SFM), on all major charges. Karony, along with co-defendants Thomas Smith (former CTO) and Kyle Nagy (project creator), faced accusations of orchestrating a sophisticated fraud scheme targeting SFM investors between 2021 and 2022.

The Conviction Details and Legal Proceedings

The two-week trial concluded with convictions on multiple counts: conspiracy to commit securities fraud, wire fraud, and money laundering. Prosecutors from the United States Department of Justice (DOJ) successfully demonstrated that the accused executives had misappropriated millions of dollars in investor funds by draining liquidity pools that were supposed to remain locked. Thomas Smith has already entered a guilty plea and served as a key witness against Karony, while Kyle Nagy allegedly fled the country and remains at large in Russia.

As Karony awaits sentencing, authorities have seized his properties valued at over $1.8 million, a stark reflection of the wealth accumulated during the fraudulent period. His net worth, once significantly higher, has been substantially impacted by these legal proceedings and asset seizures.

Market Deterioration and SafeMoon’s Downward Spiral

The SafeMoon project has experienced catastrophic losses in valuation following the indictments of its leadership. The project’s market capitalization has plummeted from approximately $1 billion at its peak to merely $7.5 million at present, reflecting an erosion of investor confidence that shows little sign of recovery.

Following the verdict announcement, SFM token suffered a sharp 4 percent decline within 24 hours, trading around $0.00002 during North American trading sessions. This bearish momentum persists despite broader cryptocurrency market recovery, with Bitcoin (BTC) surging to approximately $86.02K and altcoins like BNB and Dogecoin (DOGE) showing positive momentum.

The disconnect between SafeMoon’s performance and the wider altcoin rally underscores the severity of reputational damage. While the broader market demonstrated resilience with Bitcoin gaining over 3 percent, SafeMoon remains trapped in a downward cycle, unable to participate in the bullish sentiment sweeping through other digital assets.

Implications for the Project’s Future

SafeMoon’s trajectory serves as a cautionary tale about governance and transparency in decentralized finance projects. The sustained bearish pressure and institutional reluctance to engage with the asset suggest that recovery may prove exceptionally challenging, even if future management attempts restructuring or rebranding efforts.