SafeMoon founders Braden John Karony, Kyle Nagy, and Thomas Smith are now under arrest, facing charges of fraud and money laundering

SafeMoon founders Braden John Karony, Kyle Nagy, and Thomas Smith have been arrested and charged with securities fraud, wire fraud, and money laundering. 

The charges stem from their alleged misuse of millions in investor funds for personal luxuries, as detailed in a federal indictment unveiled today.

Inside the fraud claims

According to the damning indictment, the SafeMoon trio allegedly deceived investors about their operations. As the coin's market value rocketed to $8 billion, the founders are said to have pocketed millions of dollars for themselves. 

The money was used to buy things like luxury cars and homes in various states. Karony and Smith are now in custody, but Nagy remains at large. 

U.S. Attorney Breon Peace spoke out on the matter, crediting agencies such as the FBI for their collaboration and asserting a firm stance against fraud in the crypto sector. The IRS was also spotlighted for their role in tracking down the alleged misused funds. "We will continue our focus in the digital asset space and bring those who defraud investors in this area to justice," he said. 

SafeMoon's rise and fall

Launching in March 2021, SafeMoon stood out with its 10% transaction tax feature. Half of this tax was redistributed to SafeMoon holders, and the other half went toward the coin's growth. Rapidly, SafeMoon amassed over a million users, hitting an $8 billion valuation.

Its meteoric rise was also fueled by high-profile celebrity endorsements. Soulja Boy, Jake Paul, and Lil Yachty were among the public backers of SafeMoon. 

However, these stars found themselves embroiled in a lawsuit that accused of manipulating SafeMoon's price by misleading their fans.

About the author

Alex Dovbnya

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at [email protected].