- Safemoon CEO Braden Karony has been labeled a “danger to the community” and a flight risk by federal prosecutors
- Karony and two other Safemoon execs have been indicted for fraud over their running of the memecoin
- A New York District judge stayed the release order pending arguments on both sides
Braden Karony, the CEO of the collapsed cryptocurrency project Safemoon, was labeled a “danger to the community” by federal prosecutors during his bail hearing yesterday. Karony, who was indicted alongside two other executives last week over alleged fraud involving the memecoin, was in court as prosecutors challenged a Utah Magistrate judge’s decision to let him out on a $500,000 bail. Prosecutors consider Karony a flight risk, and as a result of their arguments, a New York District judge stayed the release order.
Karony Allegedly Defrauded Safemoon Users
Karony and fellow Safemoon executives Kyle Nagy and Thomas Smith, were charged with conspiracy to commit securities fraud, wire fraud, and money laundering for allegedly diverting millions of dollars’ worth of “locked” SFM tokens for personal benefit
The US Attorney’s Office Eastern District of New York alleges that the trio deceived investors about the operation of the smart contract, falsely claiming locked liquidity pools would grow automatically. In reality, the defendants retained control, intentionally misappropriating tokens. Despite denying SFM holdings publicly, they were reportedly actively trading for personal profit, generating millions.
The defendants used various tactics, including multiple crypto wallet addresses, complex transactions, and pseudonymous exchange accounts, making their activities difficult to trace. The misappropriated funds were allegedly used to purchase high-end vehicles and real estate in New Hampshire, Utah, and Florida.
Karony was initially granted bail but prosecutors challenged this in New York, saying the release order was given “without consideration of the defendant’s substantial financial means and ability to flee” and added his release posed a “continued danger to the community.”
As a result of the stay, Karony will remain in detention while the issue of his bail is resolved in court.