On the afternoon of Wednesday, Could 21, 2025, in a windowless, high-ceilinged courtroom in Brooklyn, Choose Eric Komitee learn the jury’s verdict.
On the cost of conspiracy to commit wire fraud: responsible.
On the cost of conspiracy to commit cash laundering: responsible.
On the cost of conspiracy to commit securities fraud: responsible.
Former SafeMoon CEO Braden John Karony had been convicted of a conspiracy to defraud traders within the infamous token. Karony, tall and bearded, sat via the trial in a razor-sharp blue go well with, absorbing proof towards him with calm detachment.
He barely reacted to the decision.
In contrast, former SafeMoon traders around the globe celebrated wildly. For them, Karony’s conviction was vindication after a virtually four-year battle to show they’d been ripped off.
Over the course of a 12-day trial, authorities prosecutors had satisfied a jury that Karony and his co-conspirator had lied about SafeMoon’s options and funds, whereas extracting as a lot as $200 million in what might be described as a “slow rug-pull.”
Now Karony faces so long as 45 years in jail — although his sentence is prone to be a lot much less. Certainly, former FTX head Sam Bankman-Fried solely acquired 25 years for a fraud practically 50 occasions bigger.
That’s only one index of SafeMoon’s relative insignificance. Most crypto veterans regarded it as a little bit of a joke even at launch, and its dramatic collapse beneath scandalous fraud allegations was overshadowed by bigger and extra surprising frauds, like Three Arrows Capital, Celsius, and the aforementioned FTX.
Nevertheless, the SafeMoon saga, in all its low-rent absurdity, bitter infighting, grandiose delusion, and sheer incompetence, could also be a greater encapsulation of crypto’s maximum-fraud period than these slick, respectable-looking cons.
If Su Zhu and Alex Mashinsky flew too near the solar, Karony and his co-conspirators barely acquired off the bottom — however nonetheless managed to crash again down at full velocity.
Now, Karony is about to be what SafeMoon’s liquidity by no means actually was: locked up.
Right here’s the way it all went down.
Contained in the Japanese District
Each courthouse is a self-contained world, somewhat island surprisingly insulated from the twenty first century.
The Japanese District of New York courthouse sits on the sting of a picturesque park in a quiet pocket close to downtown Brooklyn, the place youngsters privileged past most individuals’s wildest goals play soccer on a flawless inexperienced.
Any member of the general public can watch a trial like Karony’s, however you first have to surrender your smartphone.
On the Southern District of New York in Manhattan, you hand it over in change for an historic stamped-metal chip, like a subway token. On the EDNY, they provide you a numbered block of wooden.
The telephone check-ins (and metallic detectors and bag-scans) are manned by US Marshals, however you received’t stumble upon Raylan Givens on the EDNY. Most Marshalls listed here are greying, jovial retirees from the NYPD or Federal legislation enforcement — pleasant within the laconic means of people who find themselves used to respect by default.
Rumor has it that the previous Feds and former cops keep a good-natured rivalry.
Choose Komitee’s courtroom is on the sixth flooring of the expansive EDNY constructing, on the far finish of an echoing hallway. Down one facet hall are a half-dozen chrome telephone cubicles, now stripped of {hardware}.
One imagines journalists of an earlier period furiously submitting updates down the wire.
Now, the cubicles are a helpful place to stash a cup of espresso — banned from the courtrooms themselves.
Komitee’s courtroom is, in a phrase, cavernous — as vast as a basketball court docket, with two-storey ceilings. The choose, appointed in 2018, looms above the fray on the far finish. He’s youthful for a Federal choose, resembling Ben Affleck solely with larger ears.
From the trial’s opening moments, Karony appeared at an obstacle. Partly as a result of he was being tried within the Japanese District within the first place: Federal prosecutors typically search jurisdiction to strive monetary crimes in both the EDNY or SDNY, the place judges and attorneys have been placing away con-men like Bernie Madoff for a lot of many years.
This displays the truth that New York is the hub of American banking and finance: practically all transactions worldwide contact the bottom right here in a method or one other. Jurisdiction galore.
It additionally signifies that everybody right here is exceptionally good at this monetary crime stuff — the prosecution most of all.
There’s one other facet impact that might additionally are inclined to benefit the prosecution: a jury pool of New Yorkers, breathers of Wall Road air, swimming in complicated monetary schemes, NFT bullshit spray-painted on the partitions of Williamsburg.
Karony’s jury, in a field on the left facet of the courtroom, sat at consideration for many of the trial, even via some actually interminable wrangling concerning the trivialities of decentralized finance. Almost all took detailed notes.
One alternate’s unbelievable lineup of outfits taught each day classes about menswear.
5 attorneys and aides sat on the prosecution’s desk, simply in entrance of the jury. Notably, the lead prosecutors had been all girls, together with Assistant US Legal professional Jessica Weigel and AUSA Dana Rehnquist, who would ship a bruising closing assertion.
Weigel, petite and understated, delivered the federal government’s opening.
“John Karony lied to investors so he could get rich,” she stated. “He wanted the public to buy [his] project, so he told them it was different… he told them it was safe. It was right there in the name.”
SafeMoon’s foremost pitch, Weigel recounted, had been a promise to “lock” a liquidity pool that assured customers may at all times promote. “That was a lie,” Weigel instructed the jury.
SafeMoon did lock a number of the tokens that flowed into the pool from a “tax” on transactions, she added — “enough to calm investors’ nerves, to cover their tracks.”
Weigel instructed the jury they’d hear about this intimately, and in individual, from Thomas “Papa” Smith, the previous SafeMoon CTO. Smith had been charged alongside Karony however pleaded responsible, selecting to testify towards his former boss.
A 3rd conspirator had additionally been charged — Kyle Nagy, aka SafeMoonDev, had fled to Russia slightly than face trial.
The three wanted to cowl their tracks as a result of, the federal government would argue, “from the very beginning, [they] had been stealing from the pool.” Cash generated from SafeMoon charges had gone, to not help traders’ tokens, however to fund extravagant purchases by the co-conspirators.
Within the traditional vein of tasteless, impulsive nouveau-riche scammers, they splurged on Porsches, a number of Audi R8s, no less than one McLaren, a number of homes, and bag after bag of luxurious garments.
Karony’s mom was a fan of Louis Vuitton — and she or he was removed from alone.
Karony’s different clear handicap was the scale of his protection group — only one lawyer, Nicholas Smith, and a legislation clerk. Karony’s earlier authorized illustration, from the agency Petrillo, Klein & Boxer, had requested to be faraway from the case in February of 2024, after SafeMoon shut down and stopped paying Karony’s authorized charges.
Choose Komitee on the time directed Karony to hunt authorized support via the Prison Justice Act, which offers public funding for defendants unable to pay for their very own attorneys.
Regardless of constrained sources, Karony clearly acquired fortunate with Nicholas Smith as his fill-in. A slight and boyish man with a understanding smirk and glasses, Smith got here to court docket with a full-sized chip on his shoulder, taking hammer and tongs to each potential seam within the prosecution’s case.
“The government has made a mistake,” he declared in his opening assertion. Their proof would “seem impressive and thorough,” however Smith guided the jury to “ask yourself two questions.”
First, “did John Karony agree with someone else to deceive someone? Or did he repeatedly disclose the information he’s accused of hiding?” Second, “did the [SafeMoon] team agree? Or did they constantly disagree? If it’s the second, you have to ask yourself … is that a conspiracy?”
These had been pillars of Smith’s surprisingly credible protection. Most of the misleading claims about SafeMoon’s liquidity pool had been first made by Nagy, who named the venture and created a whitepaper and web site earlier than Karony joined.
In actual fact, inside days of becoming a member of SafeMoon, Karony directed adjustments to those paperwork that softened a few of Nagy’s lies. As a result of Karony was charged with conspiracy, these finer distinctions of duty won’t have been exculpatory in authorized phrases — however they stood an opportunity of influencing the jury.
Whereas parts of SafeMoon’s messaging continued to assert that the pool was “locked,” Nicholas Smith additionally highlighted a number of situations the place Karony or “Papa” Smith appeared to acknowledge that the locking was incomplete.
Smith would emphasize these sometimes-indirect acknowledgments whereas emphasizing the function of liquidity withdrawals in official enterprise actions, comparable to funding SafeMoon buying and selling on new exchanges.
Lastly, Nicholas Smith instructed the jury that John Karony barely understood the phrases popping out of his personal mouth when he was allegedly defrauding SafeMoon traders. When he joined SafeMoon, Smith stated, Karony knew “next to nothing about cryptocurrency or liquidity pools.”
Incompetence is never an excellent protection towards monetary fraud costs, however in Karony’s case, it had the good thing about being true.
Staff would later describe Karony, with exceptional consistency, as a genuinely good individual whom they loved working with.
Nevertheless, he had little precise enterprise expertise, was additionally “easily manipulated,” and was “a narcissist.” In a single notably egregious screwup, a SafeMoon app didn’t launch on the introduced day as a result of nobody was conscious of the lengthy approval course of for software program on the Apple App Retailer.
One staffer later reported catching Karony watching a YouTube video titled “How to Be A Better CEO.”
What was SafeMoon… Actually?
The prosecution’s first witness, on Could 6, was William Maurer, an architect from Southern California who invested in SafeMoon beginning in Could of 2021.
Prosecutors used Maurer to stroll the jury via SafeMoon’s whitepaper, technological claims, and guarantees of “safety.”
SafeMoon’s token was launched on the Binance Good Chain on March 3, 2021. It was created by Nagy, and due to influencers, wash buying and selling, and a devilishly seductive hook, it turned a virtually in a single day sensation.
It was a fork of one thing known as Bee Token, with, Nagy wrote in a readme file:
“Some added advantages. First, the dev has minted the tokens — despatched the stability to DxSale for honest launch — after which burned the rest of the tokens. Dev needed to partake in presale.
“Second, utilized the DxSale protocol to foster trust in the community by auto-locking liquidity for 4 years… 100% community owned and driven — no rug is possible. #safemoon join us on our journey safely to the moon!”
Prosecutors had Maurer information the jury via SafeMoon’s core design characteristic: a ten% “tax” on all token gross sales via the BSC-based PancakeSwap DEX.
This was meant to each discourage speculative buying and selling and supply a backstop for the token’s value — half of the tax, or 5% of all gross sales, was despatched into that “auto-locking” liquidity pool.
The opposite half of the tax is likely to be extra fascinating, not financially, however psychologically. 5 % of the Safemoon “exit tax” turned “reflections” that redistributed charges to present holders.
So not solely had been SafeMoon sellers punished on the best way out the door, however everybody who caught with the group acquired somewhat bit richer.
The tax-and-lock dynamic was the idea for the whitepaper’s reassurances of “100% safety.” The concept was to get all the worth appreciation that appeared to occur to any crypto token, as if by magic, and to eradicate the dangers of value crashes or “exit scams” by merely punishing folks for promoting.
“Safely to the moon” turned an often-repeated slogan — and later, the title of an interesting retrospective podcast by former SafeMoon gross sales employees, which was a supply for a few of what follows.
Whereas intuitively interesting, the tax-and-lock mannequin is essentially flawed. Limitations to promoting might sound to assist SafeMoon retain worth… however why precisely wouldn’t it have any worth within the first place?
SafeMoon was steadily accused of being a memecoin as a result of, past the tax, it had no utility or options. In actual fact, the “tax” arguably harmed SafeMoon’s most quick utility by making it an inefficient medium of change.
After SafeMoon, an odd subsection of the crypto world has come to contemplate “tokenomics” a synonym for this kind of “tax on selling.” That is dangerously deceptive: “tokenomics” is a way more basic time period for the financial dynamics of a decentralized system through which a token is embedded.
For instance, Bitcoin’s emission of tokens to proof-of-work miners, and the connection between real-world value and mining issue adjustment are a sublime financial loop.
SafeMoon’s tax system was only a distracting gadget connected to a token that essentially did nothing.
At the next stage, SafeMoon’s guarantees of security had been simply as a lot of a purple flag. Monetary devices, particularly people who respect quickly, are inextricable from threat, and makes an attempt to engineer away threat by no means do greater than disguise or displace it.
The core SafeMoon group most likely didn’t know any higher, although: that they had no skilled finance expertise between them. It’s fairly believable to imagine that the gamers had a naive however real religion of their means to create a revolutionary monetary instrument out of skinny air.
In his cross-examination of Maurer, Nicholas Smith hammered themes that he would develop all through the trial. He led Maurer to level out that not one of the statements Maurer examine SafeMoon’s “safety” had come instantly from Karony — as an alternative, they had been within the whitepaper.
Smith additionally established that Maurer had made his purchases via BitMart, organising the argument that liquidity pool funds had been used for the official goal of funding enlargement to different exchanges.
Weigel then requested Maurer one final query on redirect, bringing the actual core of the case again into focus.
“If you knew the SafeMoon team was draining the liquidity pool, would you have invested?” Weigel requested.
“I would not,” Maurer replied.
Right here we now have the largest drawback with SafeMoon’s tax-and-lock design. Although Nagy’s preliminary claims had been that liquidity from gross sales was “auto-locking,” the liquidity lock was completely handbook and beneath the direct management of the small core group of builders.
Although it claimed to be a “DeFi” venture, SafeMoon was on this sense considerably centralized. Liquidity could be locked solely a handful of occasions throughout SafeMoon’s existence, with Karony arguing strongly towards a number of the locks.
After April of 2021, prosecutors would present the jury, liquidity was by no means locked once more.
The SafeMoon Military
There was an viewers of roughly 20 folks for the prosecution and protection’s opening statements, largely attorneys engaged on different instances, dropping by for some fast rubbernecking.
Nevertheless, after openings and persevering with all through many of the trial, there have been solely six or seven onlookers who weren’t officers of the court docket.
On that first day, I launched myself to certainly one of them — let’s name him Gabe. Sporting sun shades and a puffer vest with a hoodie, he was clearly not a lawyer. I assumed he was a sufferer, there to look at Karony meet justice.
I used to be each proper and flawed.
Gabe defined that he was certainly a SafeMoon investor — however he was there to help Karony, who he believed had been “framed,” probably by the US authorities. SafeMoon’s tax-and-lock tokenomics, he stated, was the venture’s key innovation — and, he intimated, a risk to the fiat greenback.
Gabe instructed me he made SafeMoon-themed music in help of the venture, and I spotted his hoodie bore the SafeMoon emblem. The SafeMoon neighborhood, he stated, was “more active than ever.”
This was removed from the one member of the “SafeMoon Army” nonetheless cheering Karony on. SafeMoon attracted some of the intense cults crypto had ever seen, and whereas many former SafeMoon traders had been immensely supportive of my trial protection, there have been nonetheless loads of die-hards who reflexively declared each phrase “biased” or “FUD.”
They jogged my memory of these apocryphal Japanese troopers trapped on some distant island for many years after World Conflict II, nonetheless combating a long-lost battle.
On that first day, two different onlookers caught round, sitting within the first row of seats, instantly behind the protection desk. One was a bald, bespectacled, long-limbed man in his early sixties, who might be performed within the completely believable SafeMoon Film by Arrested Growth’s Jeffrey Tambor.
Sitting shut and infrequently whispering to him was a red-haired, designer-dressed girl with greater than somewhat of Lucille Bluth to her. For every single day of the trial, I’d discover them again of their seats, hardly ever betraying any emotion however a sort of mildly amused shock.
I started to suspect who they is likely to be: Karony’s dad and mom, Bradford and Jennifer Karony. However it was arduous to make sure. Bradford is a former Central Intelligence Company staffer, and there are only a few out there pictures of the pair.
One of many few is that this video of Bradford discussing careers in intelligence, however the pudgy man in that video appeared nothing just like the lean, wizened determine faithfully displaying as much as court docket.
Then, a supply near the household cracked the case for me: Bradford and Jennifer Karony had gone on Ozempic.
Bradford and Jennifer’s presence within the courtroom was placing. Although it barely surfaced within the court docket proceedings, SafeMoon had opened up deep rifts inside the Karony household, notably between John and his mom.
John had used liquidity pool funds to make a $5 million funding in Emanations Communication Group (ECG), a agency based by Jennifer, simply months after becoming a member of SafeMoon. ECG turned a key participant in a later stage of SafeMoon’s story, however issues didn’t go effectively, in the end resulting in Karony submitting go well with towards his personal mom.
However maybe that was all water beneath the bridge. Bradford and Jennifer, like Gabe, would attend every single day of the trial. When Karony was convicted, I’d glimpse the intelligence-linked dad and mom deep in a heartfelt dialog with the anti-government conspiracist.
The White Wizard
John M. Griffin, an skilled witness for the prosecution, then walked the jury via the small print of liquidity swimming pools and blockchain. Nicholas Smith took the chance on cross-examination to ask Griffin about using block explorers to determine blockchain transactions, a part of making the case that no one was hiding the unlocked liquidity pool.
He additionally walked Griffin via the comfort advantages of centralized exchanges, constructing the case that “seeding” change buying and selling was a official use of liquidity pool funds.
The prosecution’s star witness was subsequent — Thomas “Papa” Smith, the CTO of SafeMoon throughout its peak, and practically as a lot the face of the venture as John Karony.
However when he took the stand, Smith’s trademark beard and lengthy hair had gone from salted black to shockingly, fully gray: it was as if his November 2023 arrest and subsequent dealings with the Feds had actually sucked the life out of him.
He had taken a plea deal to testify towards Karony.
Smith was strikingly relatable on the stand, and appeared genuinely, at occasions movingly contrite and regretful about what he had executed — and he laid out precisely what that was for the jury. “We misrepresented our use of a liquidity pool… we lied to the general public.
“We would say we were going to use the money for development, then not do that.”
SafeMoon, Thomas Smith instructed the jury, had largely grown from one thing known as Tano, an organization Karony had based to make video games. In response to one other former SafeMoon staffer, certainly one of its tasks had been known as “Goat Racing Simulator,” a riff on the favored “Goat Simulator” video games.
It appears to have been a shoestring operation — in keeping with Smith, he was paid a mere “$2,000 to $3,000” per thirty days at Tano, and Smith claimed the corporate was funded completely from Karony’s bank card.
It should have felt like salvation, then, when Kyle Nagy known as Smith on March 8, 2021, to ask for assist with SafeMoon. The token had already began taking off. Smith was instantly excited, joined up as a developer, and shortly introduced Karoni alongside to run operations.
Not lengthy after, Nagy gave Thomas Smith $500,000 price of SafeMoon tokens. Big “bonuses” had been handed out to Hank Wyatt and Trevor Church on the similar time.
Whereas Nagy claimed these had been SafeMoon tokens he’d purchased with actual cash through the presale, that they had really been taken from the liquidity pool — the earliest instance of a recurring behavior.
Thomas Smith’s description of what occurred when he abruptly had half one million {dollars} was simply essentially the most poignant testimony of the trial.
“I cried,” Smith stated. “I didn’t have to fret about payments, I didn’t have to fret about how I’d eat. I wasn’t in a position to save my grandmother’s home [from foreclosure], however I had fully modified in that second.
All the things you might be, what makes you, is since you’re working in the direction of one thing. And [when you get it], you alter. You’ll be able to’t assist it.”
He added, “Previously, I had a very strong moral compass. After I had the money, I stopped asking questions, I stopped fighting back. I cared deeply about the amount that I had… I became that monster I was talking about.”
Smith went on to explain simply how prepared he turned to bend his ethics. This included utilizing obfuscating strategies to cover his gross sales of SafeMoon tokens via PancakeSwap, whereas gleefully celebrating imminent “Castle Money” in DMs with different SafeMooners — most of all, John Karony.
Smith additionally abruptly turned a fierce warrior towards “FUD,” or “fear, uncertainty, and doubt.” In AMAs or in Discord chats, Smith would “brush off” what turned out to be pretty justified and cheap considerations.
“I paid a lot more attention to FUD after that… it could spiral out of control. If there was an incredible amount of selling, the [value of the] amount that I had could go down.”
Smith testified that a method SafeMoon calmed down FUD was to “post a new lock” of a tranche of the liquidity pool.
This turned a selected level of stress after April 21, 2021, when a game-changing Tweet from an account known as Conflict on Rugs claimed, precisely, that “Owner owns more than 50% of the liquidity and refuses to fix it. He could pull LP and sell tokens, creating a rug pull. Likeliness of losing all funds: Absolute.”
Smith described how he and Nagy had tried to persuade Karony to reply by locking about $250 million price of liquidity. By this level, as they argued, SafeMoon was producing loads of charges to pay any ongoing bills.
However, in Discord messages proven by the prosecution, Karony initially refused. “No. I veto. No locking it.”
Notably, although, this big lock finally did undergo, over Karony’s preliminary objection. Protection lawyer Nicholas Smith would later cannily counsel that these performative locks really revealed to customers that the liquidity pool wasn’t as locked as had been marketed.
Thomas Smith additionally described one other portion of the fraud alleged towards Karony, involving the BitMart change. SafeMoon’s “tax” system didn’t work when it was bought via centralized exchanges (which one would possibly see as a reasonably elementary failing), however Karony had satisfied BitMart to copy its mechanics.
Nevertheless, Smith testified that as an alternative of tax funds going again into the liquidity pool, they went instantly right into a “market-making” account managed by Karony.
It was at this stage of the trial that I had my first direct interplay with Karony. Throughout a break, I used to be within the courtroom speaking to a fellow reporter. Karony walked as much as us, smiling, hand prolonged. “Thanks for covering this,” he instructed us.
Possibly it simply confirmed that Karony was, as some former staff would keep, a genuinely good man. However it was undeniably weird — in years of court docket expertise between us two reporters, nothing prefer it had ever occurred.
Over the next 10 days of the trial, different prosecution proof would set up the conspiracy and its targets much more definitively.
In a really early AMA discuss, Karony was seen mendacity to the SafeMoon neighborhood that he and the group had been being paid “a little bit,” and that he solely held about $30 price of SafeMoon himself — regardless of having been gifted 5 trillion SFM tokens, price thousands and thousands of {dollars}.
Prosecutors offered one other video that they stated Karony had manufactured from himself, on the telephone or a video chat with somebody who appears like Thomas Smith. They’re discussing cash and payroll when Karony refers to “bonuses that don’t exist.”
Extra fraudulent statements got here after the Conflict on Rugs tweet in April. In a sequence of all-caps X posts, Karony instructed the neighborhood that the liquidity pool funds is likely to be used for “EMERGENCIES” however that “WE WILL PUBLICLY GO TO THE COMMUNITY” forward of time if that was vital.
In actual fact, LP funds would proceed being pulled out for any variety of non-emergency functions, and the neighborhood was by no means notified forward of any of it.
“There is no coming back from this lie,” as Rehnquist would declare in her closing.
Monetary particulars additionally continued to emerge. Ultimately, “Papa” Smith obtained greater than $2 million price of property for his function. One other prime staffer named Hank Wyatt acquired $800,000 for lower than a yr’s work.
Withdrawals from the liquidity pool continued effectively after SafeMoon’s temporary interval within the solar had handed: a forensic accountant testified that between September and mid-December of 2021, $43 million was pulled out.
In one other set of Discord messages, Nagy asks Karony if they need to “be honest with the team” about having tapped the liquidity pool. Karony replies that they “need to talk about how to message that properly.”
Finally, that meant by no means disclosing it in any respect. As an alternative, Karony prompt taking out more cash.
As Dana Rehnquist would declare in her closing assertion for the prosecution: “That’s the conspiracy.”
The protection
Although he didn’t come out on prime, Nicholas Smith did some spectacular lawyering all through the trial. One notably sturdy instance got here in his cross-examination of his namesake “Papa” Smith.
Thomas Smith had described receiving a $500,000 present, however Nicholas Smith made certain he clarified for the jury that this present was from Nagy and had nothing on to do with Karony.
He acquired Thomas Smith to acknowledge that there was substantial disagreement, each in DeFi usually and inside SafeMoon, about whether or not it was acceptable to faucet a liquidity pool for bills (if this was ever really a widespread debate in DeFi, I missed it on the time, however the reply is now fairly clearly “no”).
Extra pointedly, Nicholas Smith highlighted a March 19, 2021, video AMA through which Thomas Smith talked about {that a} portion of the liquidity pool was not locked, explaining that it’s because locking your complete pool would make it tougher to repair issues.
“If you’re trying to lead people to believe that the entire liquidity pool was locked,” Nicholas Smith requested, “This isn’t very effective, is it?”
On the one hand, this was a really efficient line of questioning. However Nicholas Smith’s energetic fashion had a draw back: the protection lawyer appeared, now and at different factors, smarmy and superior.
Over the course of the trial, he would usually conflict with Choose Komitee whereas arguing process — kind of within the job description for protection attorneys, however not completely excellent.
Smith additionally didn’t reach mounting a really sturdy protection when it got here time to name his personal witnesses. Jake Hammock, former SafeMoon VP of product, testified to the truth of later deliberate SafeMoon merchandise, comparable to a decentralized change and an encryption software known as Orbital Protect.
These merchandise had been by no means launched regardless of massive guarantees from the SafeMoon group, however they weren’t a spotlight of the fraud costs.
Hammock additionally testified that he discovered Karony to have a law-abiding character. However on cross-examination, this gave the prosecution a gap to ask Hammock whether or not he knew that in 2021, regardless of making thousands and thousands of {dollars}, Karony “did not file or pay taxes,” or that Karony had “bribed Gambian officials.”
That final allegation was first put forth in proceedings between Karony and his mom.
Smith additionally questioned a seemingly happy SafeMoon investor named Nicholas Ranalli. A gray-haired auto plant employee from Canada, Ranalli had acted as a moderator on SafeMoon’s Fb web page, and testified that Karony had certainly disclosed that the liquidity pool was getting used — and that Ranalli didn’t have any drawback with that.
Ranalli admitted to prosecutors, although, that he was nonetheless holding all of his SafeMoon, and “hoping the price will go up.”
Karony’s protection had a forensic skilled of its personal, Rutgers economics professor Bruce Mizrach. Mizrach primarily charted SafeMoon’s value towards the announcement of latest liquidity “lock” bulletins, which confirmed these “locks” taking place after value declines, and being adopted by value rises.
In his closing assertion, Nicholas Smith reiterated the pillars of his protection: That Karony didn’t write the preliminary misleading SafeMoon whitepaper or web site; that he barely understood crypto; that SafeMoon leaders had disclosed that the liquidity pool was not “locked” (albeit not directly); that the group had disagreed about whether or not to make use of the liquidity pool.
“Conspiracy requires agreement,” Smith argued.
Smith additionally performed up SafeMoon’s sources of money aside from the liquidity pool, together with merchandise gross sales, and equated claims that SafeMoon was “safe” to a salesman’s puffed-up pitch: one thing no cheap individual would take actually.
It was all stable lawyering — however it didn’t make a distinction to the decision.
The jury deliberated for roughly three hours. John Karony was responsible, responsible, responsible.
Conviction
After the jury returned their verdict, issues weren’t fairly over.
The prosecution and protection now made arguments a few forfeiture judgment towards $1.8 million in proceeds from the sale of his Utah mansion, in addition to $107,000 that forensics had traced from the SafeMoon liquidity pool to the down cost on Brandon and Jennifer Karony’s house.
When the jury retired to deliberate on the forfeiture, I stepped out for some water. On my means again, I crossed paths with Karony and Nicholas Smith, seemingly headed to the lavatory.
I walked previous the now-convicted man with out acknowledging the pair. However then, from behind me, got here Karony’s chummy shout.
“David, they’re not back yet!” He appeared mild, blithe, nice — by no means like somebody who had simply been convicted of a criminal offense which may ship them to jail for 4 many years.
I used to be raised proper — to look folks within the eye, provide a agency handshake, to say please and thanks. However I used to be so shocked by the strangeness of it (and admittedly, so anxious about showing pleasant in the direction of Karony) that I didn’t reply in any respect.
Completely icing somebody isn’t actually my means. It was impolite.
However I can’t say I really feel too dangerous.
