Former SafeMoon CEO Sentenced to 100 Months in Prison: End of Billion-Dollar Rug Pull Scandal

The former chief executive of the phenomenal crypto project SafeMoon, Braden John Karony, was officially sentenced to 100 months in prison by a United States federal court in February 2026.

The verdict follows a lengthy trial that proved an organized fraud scheme that harmed thousands of retail investors worldwide.

U.S. District Judge Eric Komitee in Brooklyn asserted that Karony's actions were not simply a business failure, but an act of deliberate theft under the guise of technology.decentralized finance.

Key Takeaways

• Braden John Karony received a sentence of eight years and four months in prison on charges of securities fraud conspiracy, wire fraud, and money laundering.

• The convict was required to hand over assets worth US$7.5 million and two luxury properties as a form of state confiscation.

• The court found evidence of the use of investor liquidity funds to purchase an Audi R8 sports car, modified vehicles, and a luxury home in Utah.

Analysis of John Karony's SafeMoon Verdict and Liquidity Manipulation

The John Karony SafeMoon verdict serves as a stark reminder to the digital asset industry about the hidden risks of market manipulation through smart contracts.

Since its launch, SafeMoon has marketed itself as a safe haven asset with a ten percent tax mechanism on every transaction to automatically lock in liquidity.

However, the 2026 sentence of SafeMoon's CEO revealed that access to the liquidity pool was never truly locked down, but was freely accessible to company executives for personal gain.

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The SafeMoon Rug Pull Scandal: Price Manipulation and a Luxurious Lifestyle

The SafeMoon rug pull scandal reached its peak when the project's market capitalization reached eight billion US dollars.

In its heyday, the development team promised fantastic price growth to token holders, but secretly withdrew millions of dollars in funding to fund a lavish lifestyle.

The John Karony fraud case demonstrates the complexity of the tactics used, from elaborate transaction routing to the use of fake exchange accounts to launder the proceeds of crime from customer funds.

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The Major Impact of SafeMoon Investor Losses Worldwide

The extent of SafeMoon's investor losses spanned a wide range of groups, including military veterans and hard-working individuals lured by massive promotions on social media.

Prosecutors allege that Karony consistently lied to the public about his personal token holdings and access to company funds.

The jailing of the former SafeMoon CEO is expected to bring a sense of justice to the millions of wallet addresses whose asset values ​​have plummeted by more than ninety-nine percent since reaching their peak.

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Latest SafeMoon Case Update and FBI Legal Action

The latest SafeMoon case update confirms that the FBI is still working to identify additional victims for future restitution or refund purposes.

Even though Karony has been sentenced, the search for Kyle Nagy, who is suspected of fleeing abroad, remains a top priority for federal law enforcement.

This decisive step reinforces the government's commitment to ridding the digital asset market of malicious actors who undermine public confidence in the stability and security of the global crypto market.

The following is a summary of the legal process that has been undertaken by the relevant parties:

1. Prosecutors presented evidence of the use of customer funds for a lavish lifestyle that did not match the company's marketing promises.

2. A jury returned a guilty verdict in May 2025 after a three-week trial in Brooklyn court.

3. The judge ordered the seizure of fixed and liquid assets as part of the final sentence imposed in February 2026.

4. Authorities encourage victims to continue reporting losses through official channels to record the total amount of restitution that must be paid by the convict.

Conclusion: Valuable Lessons from the Fall of SafeMoon

The SafeMoon crash provides a bitter but important lesson for the crypto community about the importance of transparency in liquidity pool management.

John Karony's one-hundred-month prison sentence proves that aggressive marketing narratives cannot mask fundamental flaws in the code or the integrity of the development team.

In the future, investors are expected to be more wary of projects that promise fixed profits through transaction tax mechanisms without truly independent and transparent security audits.

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FAQ

How long was John Karony, the former CEO of SafeMoon, in prison?

Braden John Karony was sentenced to 100 months in prison or approximately 8 years and 4 months by the Brooklyn federal court for his involvement in investor fraud and money laundering.

What assets were seized from the former SafeMoon CEO? 

In addition to the prison sentence, the judge ordered the seizure of $7.5 million in assets and two luxury properties in Utah owned by John Karony to cover some of the losses from the scandal.

Is it true that SafeMoon is running a rug pull scheme?

Yes, the trial proved that the SafeMoon team secretly withdrew millions of dollars from a supposedly “locked” liquidity pool, which was then used for the personal benefit of its executives.

What is the status of the other perpetrators in the SafeMoon case? 

Thomas Smith has pleaded guilty and is awaiting sentencing, while SafeMoon's other co-founder, Kyle Nagy, remains a fugitive and is being sought by US law enforcement.

Can SafeMoon victims get their money back? 

Legal authorities and the FBI are identifying victims for restitution. However, due to the magnitude of the losses compared to the seized assets, restitution is unlikely to fully cover investors' losses.