- Safemoon CTO Thomas Smith has pleaded guilty to charges in a $200 million crypto fraud case.
- US authories arrested the Safemoon exec, alongside CEO Braden John Karony, in 2023.
Thomas Smith, the chief technology officer of SafeMoon LLC, has pleaded guilty to two charges of securities fraud conspiracy and wire fraud conspiracy.
Smith pleaded guilty to the charges at a Brooklyn federal court per filings on Feb. 20.
The Safemoon CTO, whose earlier move was to deny the charges, changed tune and admitted to his role in a scheme that saw investors defrauded of more than $200 million.
Per the court documents, Smith withdrew his earlier not guilty plea before Magistrate Judge Cheryl Pollak, a move that marks the latest development in the Department of Justice and US Securities and Exchange Commission’s case against the defunct crypto project’s tech chief.
Safemoon CTO’s guilty plea
In his plea, the Safemoon CTO admitted to having misled investors regarding the state of SafeMoon’s liquidity pool.
He also agreed to making false claims about the assets being locked and inaccessible. Smith and Safemoon CEO Braden John Karony diverted funds for personal use, prosecutors allege. Safemoon filed for bankruptcy in December 2023.
Judge Pollak has recommended that the US District Judge Eric Komitee accept Smith’s new plea.
Blockchain and internet detective Coffeezilla, commented on the plea change:
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
Should Judge Komitee accept Smith’s plea, sentencing means a potential 20 years in prison for wire fraud conspiracy. The Safemoon exec would face up to 25 years behind bars for securities fraud.
Safemoon execs arrested
The DOJ and SEC charges against Smith, Karony and Safemoon creator Kyle Nagy stem from a 2023 investigation into the crypto project.
In November 2023, US prosecutors sued the crypto executives for misleading investors with regard to the SFM token. Charges included wire fraud, conspiracy to commit securities fraud and money laundering.
According to proscutors, the defendants allegedly used the more than $200 million siphoned from investor funds to splash on luxury cars and real estate among other expensive purchases. While law enforcement promptly arrested the CTO and CEO soon after the DOJ’s indictment, SFM creator Kyle Nagy remains at large.