Crypto Drama: Ex-SafeMoon CEO’s Legal Circus Continues! 🎪💰

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In a twist that could only be described as a plot device from a particularly convoluted novel, federal prosecutors have decided to keep their case against Braden John Karony, the erstwhile CEO of the crypto firm SafeMoon, alive and kicking. This is despite the US Justice Department issuing a memo that suggests they might prefer a more relaxed approach to “regulation by prosecution” when it comes to digital assets. Because who needs rules, right? 🤷‍♂️

In a filing dated April 18, in the US District Court for the Eastern District of New York (a place where legal dramas unfold with the same frequency as bad reality TV), US Attorney John Durham announced that his office had taken a good, hard look at the April 7 DOJ memo from Deputy Attorney General Todd Blanche. Spoiler alert: they decided to proceed with a trial against Karony. 🎭

Now, Karony is facing a veritable buffet of charges: securities fraud conspiracy, wire fraud conspiracy, and money laundering conspiracy. All this for allegedly “diverting and misappropriating millions of dollars’ worth” of the platform’s SFM token between 2021 and 2022. It’s like a heist movie, but with more paperwork and fewer explosions. 💥

Initially indicted in October 2023 under the watchful eye of former US Attorney Breon Peace, Karony argued in February that his trial should be delayed. He hinted that the enforcement of securities laws under the Trump administration might see “significant changes.” The judge, however, was not in the mood for delays and ordered jury selection to commence on May 5. Because who doesn’t love a good courtroom drama? 🎬

Karony’s legal team, in a move that could only be described as optimistic, claimed that securities laws under Trump might undergo “policy changes” before the SEC decided to drop cases against various crypto firms. Blanche’s memo also suggested that the DOJ would prefer to avoid pursuing many crypto enforcement cases. It’s like a game of legal dodgeball, but with much higher stakes. 🏐

“The parties may learn within days or hours of the trial that the DOJ no longer considers digital assets like SafeMoon to be ‘securities’ under the securities laws,” said Karony’s legal team. “Worse, they might discover this during or shortly after a trial, half of whose charges rest on the government’s claim that SafeMoon is such a security.” Talk about a plot twist! 📚

Crypto enforcement by the SEC and DOJ under Trump

Since being appointed acting SEC chair by Trump in January, Mark Uyeda has led the agency to drop cases against Ripple Labs, Coinbase, Kraken, and others. The SEC has also launched a crypto task force, headed by Commissioner Hester Peirce, to explore a regulatory framework for digital assets. They even issued a memo declaring that memecoins are not securities. Because why not? 🐶

The agency’s actions suggest a more permissive approach to digital assets than that under former chair Gary Gensler. It’s almost as if they’re saying, “Go on, have fun with your digital money!”

“By directing the SEC to abdicate its critical mission of investor protection, Mr. Trump is unnecessarily endangering our financial system,” said former SEC official John Reed Stark in an April 18 New York Times op-ed. “Whether he is doing so to keep his promise to crypto-donors or in a zeal to cash in (or perhaps even both), that is a troubling development not just for investors and banks, but for all of us.”

As for whether Trump’s appointees in the Justice Department will step in to halt Karony’s case, as they did in the corruption case with New York City Mayor Eric Adams, that remains a mystery. At the time of publication, the former SafeMoon CEO was set to go to trial in May and has been free on a $3 million bond since February 2024. He has pleaded not guilty to all charges, which is a classic move in the legal playbook. 🎭

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2025-04-18 22:02