By the Constantine Cannon Whistleblower Team
Guity Verdict for Former CEO of Crypto and Blockchain Company SafeMoon:
In an earlier article, we wrote about how federal prosecutors in the Eastern District of New York reaffirmed their intent to pursue criminal fraud charges against Braden John Karony, the former CEO of the cryptocurrency and blockchain company SafeMoon. As we previously analyzed, the decision to continue the prosecution of that case was particularly notable given that it followed the release of a memorandum signaling that the DOJ under the Trump Administration will scale back certain enforcement actions involving cryptocurrency and digital assets.1
Last week, after a 12-day trial, a federal jury in Brooklyn convicted Karony on all counts: conspiracy to commit securities fraud, wire fraud, and money laundering.2 The jury verdict also called for forfeiture amounting to roughly $2 million. According to the DOJ, Karony faces up to 45 years in prison.3
In announcing the verdict, U.S. Attorney Joseph Nocella Jr. provided the following comments:
“As proven at trial, the SafeMoon digital asset was anything but safe and turned out to be pie in the sky for investors who were deliberately misled by Karony, a man who sought to get rich quick by stealing and diverting millions of dollars. Karony used his scheme to purchase multiple homes, sports cars, custom trucks, and other luxury goods. Today’s guilty verdict should serve as a warning to all would-be fraudsters that my Office will vigorously prosecute individuals like the defendant who victimize digital asset investors and undermine investor confidence in digital assets markets, thereby threatening the stability and growth of these emerging technologies.”4
Key Takeaways:
The decision to proceed with this trial notwithstanding the DOJ Deputy Attorney General’s memo is notable. Many have taken the memo, along with recent decisions of the SEC to drop enforcement actions against cryptocurrency and digital asset firms, as a sign that the government’s enforcement priorities are shifting away from cryptocurrency and digital asset firms. While enforcement priorities may have shifted, this prosecution and guilty verdict stand as an important reminder that not all charges related to cryptocurrencies and digital assets are off limits. In particular, the government can continue to bring enforcement actions against individuals and firms that victimize investors.
The SEC’s Whistleblower Program:
The Securities and Exchange Commission (SEC) enforces federal securities laws and works to protect against securities fraud. Whistleblowers can be eligible for rewards under the SEC Whistleblower Program, which can reward individuals with up to 30% of government recovery stemming from information the whistleblower provides. The program has been greatly successful since its start in 2012 under the Dodd-Frank Act. It has led to billions of dollars in SEC recoveries, and the SEC has awarded more than $2.2 billion to 444 individual whistleblowers under the program.
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1 See Apr. 7, 2025, Memorandum from Deputy Attorney General Todd Blanche, “Ending Regulation By Prosecution,” available at https://www.justice.gov/dag/media/1395781/dl?inline
2 See May 21, 2025, U.S. Atty’s Office for E.D.N.Y. Press Release, “Chief Executive Officer of Digital Asset Company Found Guilty in Multi-Million Dollar Crypto-Fraud Scheme,” available at https://www.justice.gov/usao-edny/pr/chief-executive-officer-digital-asset-company-found-guilty-multi-million-dollar-crypto
3 Id.
Read UPDATE: DOJ Continues Cryptocurrency Fraud Case Despite Memo Signaling Change in Enforcement Priorities – Case Ends with Conviction at constantinecannon.com
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