SafeMoon Founders Face Trial for Securities Fraud as Project Plummets

According to CryptoPotato, SafeMoon, a project aimed at 'safely' mooning a token by imposing high fees on holders cashing out, saw its value plummet after investors discovered that the investment pools were not locked as promised. The project had reached a market cap of $5.7 billion within the same month. Prosecutors allege that SFM tokens were used to fund a luxurious lifestyle for the project's founders, including the purchase of a custom Porsche sports car, luxury vehicles, and real estate. This belief is supported by a smart contract exploit worth nearly $9 million that the project suffered earlier this year, which many suspect was an inside job. Founders Kyle Nagy, Thomas Smith, and Braden John Karony are accused of committing securities fraud. Karony, the project's CEO, faces a maximum of 45 years in prison if found guilty. Earlier this month, Karony and Smith were arrested, while Nagy remains free for undisclosed reasons. Smith has since secured bail in exchange for a $500k bond and is reportedly pursuing a plea deal. Karony also attempted to secure a temporary release, but the prosecution blocked his bid a day later. On November 8th, Karony was granted bail for the same amount as his co-executive. If granted, Karony would be allowed to live in his Miami apartment with no access to crypto exchanges and wallets and would be barred from promoting any of his businesses in any form. However, New York District Judge LaShann DeArcy Hall has stayed Judge Oberg's decision to approve bail following a hearing in Utah. According to the prosecution, Karony presents a significant flight risk, having major connections in Europe, including his fiancée. Furthermore, the court allegedly failed to accurately assess the defendant's assets. The prosecution believes that Karony still has access to millions of dollars, compared to which 500k is a drop in the bucket. Karony's bail conditions will be reviewed at a later date and may be revoked entirely.