CTO of SafeMoon Admits Guilt in $200 Million Crypto Fraud Case

The Chief Technology Officer of the DeFi project SafeMoon, Thomas Smith, admitted guilt on two counts related to a $200 million cryptocurrency fraud case, as reported by Cointelegraph, citing a court document from February 20.

Smith altered his earlier statements, accepting responsibility for conspiracy to commit securities fraud and for using electronic communications in the scheme.

Each charge carries a potential sentence of up to 20 and 25 years in prison, respectively.

In the 2023 case, the U.S. Department of Justice and the Securities and Exchange Commission (SEC) also filed charges against SafeMoon’s CEO, John Karony, and project creator Kyle Nagi.

According to investigators, the SafeMoon leadership misled purchasers of the SFM token, which was launched on a public blockchain. Karony, Smith, and Nagi claimed that the asset’s liquidity was locked, while they had access to the funds.

Subsequently, approximately $200 million belonging to investors was allegedly used by the defendants to purchase luxury real estate and vehicles, stated officials from the SEC and the prosecution.

They further noted that the market capitalization of SFM reached $8 billion but plummeted nearly by half on April 20, 2021, when it became apparent that the token’s liquidity was not actually locked.

Smith and Karony were arrested in November 2023, while Nagi has gone missing, and his whereabouts remain unknown.

Additionally, it is worth noting that on February 20, a former employee of the payroll provider Bybit pleaded guilty to stealing $5.7 million, primarily in cryptocurrency. She was apprehended in April 2023.