SafeMoon

SafeMoon was a cryptocurrency token launched in March 2021 on the BNB Chain, promoted by SafeMoon LLC, with a 10% transaction fee that redistributed 5% to holders and added 5% to a liquidity pool.¹⁸¹⁷ In November 2023, federal prosecutors charged SafeMoon executives Braden John Karony, Kyle Nagy, and Thomas Smith with conspiracy to commit securities fraud, wire fraud, and money laundering, alleging they misappropriated over $200 million in cryptocurrencies.¹⁷ SafeMoon US, LLC filed for Chapter 7 bankruptcy on December 23, 2023, and in May 2025, CEO Braden Karony was convicted on all three charges, while CTO Thomas Smith pleaded guilty in February 2025 and founder Kyle Nagy remained at large.¹⁴¹⁷

Timeline

Money raised

SafeMoon's team raised $1 million in community funding for the development of the SafeMoon Exchange, as announced on April 28, 2021.¹³ The SEC alleged that SafeMoon executives misappropriated over $200 million in cryptocurrencies.¹⁷ In March 2023, a bug in the burn function allowed the withdrawal of $8.9 million from the liquidity pool.¹⁷ The bankruptcy trustee sought approval of a $90,000 settlement of claims against Jake Paul.¹⁸

Investors named in the sources: Jake Paul¹⁸.

What happened

SafeMoon was launched in March 2021 as a token on the BNB Chain, promoted by SafeMoon LLC, a U.S. cryptocurrency and blockchain company.¹⁷ SafeMoon utilized three core tokenomics mechanisms: static rewards, manual burns, and automatic liquidity protocol.¹ For every transaction, the SafeMoon smart contract charged a 10% fee, with 5% split among existing holders, 2.5% automatically converted into BNB, and 2.5% paired with the BNB to serve as a liquidity pair on PancakeSwap.¹ SafeMoon was founded by John 'CptHodl' Karony, with other core members including Thomas Smith and Henry Wyatt.¹ Karony previously served as an analyst at the US Department of Defense and was the Founder and CEO of TANO, an indie games startup based out of Utah.¹

SafeMoon's price remained fairly stable until a short burst at the start of April 2021, followed by a massive rally later in the month.¹ The token went from $0.000001 on April 3 to $0.000005 on April 30, representing a growth of 1620% over a single month.¹ SafeMoon reached its all-time high of $0.000008 on April 20, only to crash to $0.000003 on the next day.¹ By April 20, SafeMoon had become the most-searched cryptocurrency for three days in a row on CoinMarketCap.¹ SafeMoon reached a $1 billion market cap in less than a month.¹

Critics noted that beyond promising to 'moon' the value of its token, SafeMoon did not seem to offer much of a use case.¹ An article published in Money Morning argued that SafeMoon's price was 'destined to collapse,' and would likely wipe out the money of anyone left holding the bag.¹ The SafeMoon project and its promoters were accused of utilizing penny-stock tactics to lure novices into a pump-and-dump.¹ Some noted that SafeMoon's tokenomics mechanisms resembled those of the infamous BitConnect pyramid scheme.¹ An analyst at Seeking Alpha noted that for SafeMoon to reach the $0.01 valuation target set by some of its promoters, its market cap would have to eclipse all the household wealth of the United States.¹

SafeMoon's roadmap included ambitious plans for the development of an app, wallet, crypto game integrations, and a non-fungible token (NFT) exchange.¹ The team also planned to establish a European office and launch the SafeMoon exchange, a mobile-first DEX.¹ The project reached its $1 million community funding goal for the development of the SafeMoon Exchange.¹¹³ SafeMoon's dev team announced the token would be available in the Middle East soon and announced a China launch on Tuesday.¹³ John Wu, president of Ava Labs, said SafeMoon had benefited from social media hype, stating: 'Worst case, this is a scam or Ponzi scheme. Better case, this was a euphoric rally driven by TikTok and other viral marketing engines.'¹³

On 16 November 2021, SafeMoon won the 'Crypto Community of the Year' award at the AIBC Gaming Summit in Malta.¹¹ SafeMoon CEO John Karony said in his acceptance speech: 'We're a nine-month-old blockchain innovation company, a tech company. We created the most talked-about cryptocurrency on the market right now and have 2.8 million holders, one of the fastest growing communities in the world. We won The Best Cryptocurrency Community Award. We have a valuation of around $3bn-$4bn… And we did this all in nine months.'¹¹ SafeMoon replaced its chief blockchain officer, Thomas Smith, with a new team, stating that the handover process started in September 2021.¹¹ On 25 January 2022, SafeMoon tweeted that it had passed 1 million SafeMoon Wallet downloads.¹¹ The SafeMoon V2 upgrade was launched on 12 December 2021, consolidating the old SAFEMOON token by a ratio of 1000:1.¹¹

The new SFM coin stood at $0.001639 at the start of trading on 16 December 2021, and it was immediately hit by problems, falling to an all-time low of $0.0000002453 on 18 December.¹¹ SFM reached an all-time high of $0.007232 on 4 January 2022.¹¹ In February 2022, a class action lawsuit named SafeMoon and several influencers for an alleged pump-and-dump scheme.¹⁷ In March 2023, a bug in the burn function allowed the withdrawal of $8.9 million from the liquidity pool, eroding trust in the project.¹⁷ On 1 November 2023, the SEC and DOJ filed charges against CEO Braden John Karony, CTO Thomas Smith, and founder Kyle Nagy with misrepresenting the status of the liquidity pool and diverting millions from it.¹⁷

The SEC also alleged wash trading practices.¹⁷ According to the SEC, they misappropriated over 200 million dollars in cryptocurrencies.¹⁷ As later demonstrated in court, between March 2021 and approximately June 2022, Karony and his co-conspirators agreed to lie to SafeMoon V1 investors about whether company executives had access to the liquidity pool and whether they were using its resources for personal gain.¹⁷ In December 2023, SafeMoon filed for bankruptcy under Chapter 7.¹⁷ On December 23, 2023, SafeMoon US, LLC filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code.¹⁴

The bankruptcy case is administered under Case No. 23-25749 and is pending before the Honorable Peggy Hunt in the United States Bankruptcy Court for the District of Utah.¹⁴ The Meeting of Creditors was held on January 17, 2024 at 10:00 a.m. (PT).¹⁴ The General Bar Date and Government Bar Date for filing claims were set for July 22, 2024.¹⁴ A hearing regarding private sale of token assets was scheduled for August 21, 2024.¹⁴ In February 2025, Thomas Smith pleaded guilty to conspiracy to commit securities and wire fraud.¹⁷

On 21 May 2025, Braden Karony was convicted on all three charges: conspiracy to commit securities fraud, wire fraud, and money laundering.¹⁷ Kyle Nagy remains at large according to updated FBI reports.¹⁷ The FBI's New York field office is still trying to identify potential victims of Braden John Karony, Thomas Smith, and Kyle Nagy.¹⁷ The FBI is asking anyone who lost money after purchasing SafeMoon tokens to come forward to report their investment and the amount lost.¹⁷ The bankruptcy trustee sought approval of a $90,000 settlement of claims against Jake Paul.¹⁸

Legal outcomes

• chargedIn November 2023, federal prosecutors announced charges against SafeMoon executives Braden John Karony, Kyle Nagy, and Thomas Smith for conspiracy to commit securities fraud, wire fraud, and money laundering.¹⁷
• filedThe SEC filed a civil action against the executives, alleging they misappropriated over $200 million in cryptocurrencies and engaged in wash trading practices.¹⁷
• pleadedIn February 2025, Thomas Smith pleaded guilty to conspiracy to commit securities and wire fraud.¹⁷
• convictedOn May 21, 2025, Braden John Karony was convicted by a federal jury on all three charges: conspiracy to commit securities fraud, wire fraud, and money laundering.¹⁷
• pendingKyle Nagy remains at large and is considered a fugitive.¹⁷
• filedA class action lawsuit was filed in February 2022 against SafeMoon and several influencers for an alleged pump-and-dump scheme.¹⁷
• settledThe bankruptcy trustee sought approval of a $90,000 settlement of claims against Jake Paul.¹⁸

Where the founders are now

Braden John Karony was convicted on all three charges on May 21, 2025, and is pending final sentencing.¹⁷ Thomas Smith pleaded guilty in February 2025 to conspiracy to commit securities and wire fraud.¹⁷ Kyle Nagy remains at large according to updated FBI reports.¹⁷

Sources

1. SafeMoon Explained: Is SafeMoon a Good Investment? - Phemex Academy, phemex.com, May 17, 20
8. How to Buy SafeMoon Crypto, investopedia.com
11. SafeMoon Price Prediction | Will Safemoon Reach $1?, dzengi.com, Feb 10, 20
13. SafeMoon Raises $1m for Crypto Exchange As Price Drops 60% From April High, Newsweek, 2021-04-28
14. SafeMoon US, LLC, cases.stretto.com
15. , justice.gov, Jun 12, 20
17. SafeMoon: the FBI is seeking victims, Boccadutri, 2025-10-22
18. SafeMoon US, LLC bankruptcy: docket, status and key dates, ElevenFlo, Sep 18, 20

How this case file was put together

Every statement on this page carries a numbered note, and every note points to a court record, a regulatory filing or a named publication in the list of sources. Each statement was checked against the text of the sources it cites before it was published: a figure, a date or a name the cited source does not contain was cut rather than kept. Allegations are shown as allegations, with their status at the time of the source (filed, charged, convicted, pleaded, settled, dismissed or pending). Quoted lessons are the words of the person or publication named with them, copied from the cited source; nothing here is our own opinion of why the company failed.

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