SafeMoon’s Former CEO Faces Fraud Charges as DOJ Maintains Case

A push by the Trump-era Justice Department to scale back crypto enforcement has done little to deter federal prosecutors from pursuing Braden Karony, the former CEO of SafeMoon, who faces fraud charges tied to the token’s collapse, law360.com reported, citing DOJ filings today (Friday).

His upcoming trial in May now serves as a key test of whether the DOJ’s new approach will shield executives from past alleged wrongdoing. In an April 18 court filing, U.S. Attorney John Durham of the Eastern District of New York confirmed that his office would proceed with the case against Karony.

Prosecutors Move Forward Despite New Memo

This came less than two weeks after Deputy Attorney General Todd Blanche issued a DOJ memo suggesting the department may stop pursuing crypto-related cases rooted in “regulation by prosecution.”

Karony faces charges including conspiracy to commit securities fraud, wire fraud, and money laundering. Prosecutors allege he misappropriated millions of dollars in SFM tokens between 2021 and 2022. He pleaded not guilty and has been out on a $3 million bond since February.

Today we charged SafeMoon LLC, its creator Kyle Nagy, SafeMoon US LLC, and the companies’ CEO, John Karony, and Chief Technology Officer, Thomas Smith, for perpetrating a massive fraudulent scheme through the unregistered sale of the crypto asset security, SafeMoon.

Karony’s defense team had argued that his trial should be postponed, given the evolving stance on crypto regulation under President Donald Trump. His lawyers said there was a real possibility that the government might soon stop treating assets like SafeMoon as securities, undermining the core of the case.

Since Trump took office, the SEC and DOJ have moved away from aggressive crypto enforcement. The SEC, under acting chair Mark Uyeda, dropped several high-profile cases against Ripple Labs, Coinbase, and Kraken. The agency also formed a new task force, led by Commissioner Hester Peirce, to explore regulatory clarity around digital assets.

Trump-Era Shift in Enforcement Signals Broader Change

In addition, memecoins were declared outside the scope of securities laws, signaling a more relaxed posture compared to the approach under former chair Gary Gensler.

Despite the policy changes, Karony’s case is moving forward, raising questions about how far the DOJ’s new stance will go. While other cases have been dropped or paused, the SafeMoon case continues, at least for now, as a possible exception—or perhaps as a final chapter from a stricter regulatory era.

Last year, the SEC filed charges against SafeMoon, its Founder, Kyle Nagy, SafeMoon US, and the company's top executives, John Karony and Thomas Smith. The regulator disclosed a fraudulent scheme related to the unregistered sale of SFM, a cryptocurrency that promises substantial returns to investors.