SafeMoon Founders Arrested, Charged With Diverting and Misappropriating $200,000,000 in Investor Funds

By The Daily Hodl November 04, 2023 In SafeMoon

US authorities have arrested two executives and the creator of the crypto company SafeMoon for allegedly defrauding investors.

SafeMoon creator Kyle Nagy, CEO Braden John Karony and chief technology Thomas Smith are being accused by the U.S. Department of Justice (DOJ) of deliberately misleading investors.

According to the DOJ, the three accused falsely claimed that assets held in SFM liquidity pools could not be withdrawn by anyone. The three allegedly had access to withdraw assets from these pools.

The three then allegedly diverted over $200 million worth of their client’s investments to enrich themselves and pay for expensive purchases, which include a custom Porsche sports car, other luxury vehicles and real estate.

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The DOJ has charged Nagy, Karony and Smith with conspiracy to commit securities fraud, conspiracy to commit wire fraud and money laundering conspiracy.

Says Internal Revenue Service Criminal Investigation (IRS-CI) special agent-in-charge Thomas M. Fattorusso,

“Although this fraud scheme may be complex, the end result is simple—theft. Investors were assured their money would be safe while the defendants allegedly misled investors and diverted millions of dollars to line their pockets and their driveways.”

The U.S. Securities and Exchange Commission (SEC) also filed charges against the three, alleging that they carried out a massive fraudulent scheme through the unregistered sale of a crypto asset security.

“Defendants promised to take the price of the token “Safely to the moon,” but instead of delivering profits, they wiped out billions in market capitalization, withdrew crypto assets worth more than $200 million from the project, and misappropriated investor funds for personal use.”

Karony and Smith were arrested on Wednesday while Nagy is still at large.

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