Thomas Smith, the chief technology officer (CTO) of SafeMoon LLC, has pleaded guilty to two charges related to a multimillion-dollar cryptocurrency fraud scheme, according to a court filing dated 20 February 2025.
The plea marks a significant development in the high-profile case brought by US prosecutors and the Securities and Exchange Commission (SEC).
Smith appeared before Magistrate Judge Cheryl Pollak in a Brooklyn federal court to withdraw his previous not-guilty plea. He admitted to charges of conspiracy to commit securities fraud and conspiracy to commit wire fraud.
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Judge Formally Accepts New Plea
Judge Pollak has recommended that US District Judge Eric Komitee, who is overseeing the case, formally accept the new plea.
If convicted at sentencing, Smith faces a maximum of 25 years in prison for the securities fraud conspiracy charge and up to 20 years for the wire fraud conspiracy charge.
The charges stem from a joint investigation by the Department of Justice (DOJ) and the SEC, which in November 2023 accused Smith, SafeMoon CEO Braden John Karony, and SafeMoon creator Kyle Nagy of misleading investors.
Prosecutors claim the trio falsely assured buyers of SafeMoon (SFM) tokens that the token’s liquidity pool was locked and inaccessible to company insiders.
3 years ago we exposed SAFEMOON's fraud.
They told their community it was just "FUD".
Today their CTO Thomas Smith pled guilty. pic.twitter.com/MgUK6R0FcC— Coffeezilla (@coffeebreak_YT) February 20, 2025
In reality, authorities allege, the executives diverted over $200 million in investor funds for personal use, purchasing luxury vehicles and real estate.
SafeMoon, a once-popular token, reached a market capitalization of between $5.7 billion and $8 billion before suffering a massive collapse. On 20 April 2021, its value plummeted by nearly half after reports emerged that the liquidity pool was not secured as previously claimed.
While Smith and Karony were arrested following the charges, Nagy remains at large and is believed to have resurfaced in Russia. Karony has maintained his innocence, filing a motion to dismiss the charges in April 2023, which was denied.
Earlier this month, Karony sought to delay his trial, citing potential changes in US crypto policy under President Donald Trump that could impact his case. However, Judge Komitee rejected the request, setting the trial to begin with opening statements on April 7.
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SafeMoon CEO Faces Legal Struggles
Last year, Karony faced legal challenges as his defense team from Petrillo Klein Boxer withdrew in January due to a lack of funds, leaving him with a public defender.
Prosecutors allege Karony, along with Nagy and Smith, misappropriated millions from supposedly “locked” liquidity pools meant to safeguard customer funds.
Instead, the trio allegedly diverted the money for personal use, purchasing luxury items, including a custom Porsche, other high-end vehicles, and real estate.
The US Attorney’s Office criticized the executives for prioritizing personal wealth over investor trust, despite SafeMoon reaching an $8 billion valuation.
Ivan J Arvelo of Homeland Security Investigations stated that the defendants’ greed resulted in significant financial harm to clients. Karony, currently out on a $3 million bail, has no confirmed date for his next court appearance.
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Key Takeaways
- SafeMoon CTO Thomas Smith pleaded guilty to conspiracy charges in a multimillion-dollar crypto fraud case.
- Prosecutors allege Smith and other executives misappropriated over $200 million in investor funds for personal luxury purchases.
- Smith faces up to 25 years in prison, while SafeMoon’s CEO awaits trial amid ongoing legal challenges.
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