In 2021 Safemoon launched and their army of brainlets spammed every corner of the Internet in conjunction with paid-off 'celebrity' endorsements, they managed to capture lightning in a bottle and Safemoon catapulted to an $8 Billion market cap, riding on the promise of a token that cannot be rugpulled because the Liquidity Pool was auto-generating and locked.
PooCoin, Coffeezilla, teams of Crypto detectives and yours truly spent the next few years determinedly pointing the overzealous Safemoon fanboys to the truth which lay on the Blockchain only to be met with insults, threats and ridicule, and we faced the ultimate vindication in November 2023 when Safemoon CEO John Karony and former CTO Thomas Smith were arrested and charged with Conspiracy to commit Wire Fraud, Securities Fraud and Conspiracy to Commit Money Laundering.
Next week, John Karony goes on trial, up against the Department of Justice which has a 93% conviction rate at trial, who have crafted a watertight case of fraud and deception.
John Karony loudly proclaims on social media: I am innocent. I did not commit fraud.
But hang on, doesn't the blockchain show him offramping tens of millions of millions of dollars?
Let's go over John's various legal defenses:
1. Extraterritoriality.
The extraterritoriality defense was John saying "I cannot be charged for these crimes in the US because the alleged acts involve Safemoon, which is a token on the international Binance Smart Chain."
This attempted defense failed because:
- Safemoon LLC is a US company
- John Karony is a US citizen
- Numerous harmed investors were US citizens
The motion to dismiss charges based on this defense was denied.
2. "It wasn't me"
Even I find this attempted defense hard to believe.
John's motion to dismiss included this absolute nugget.
The Indictment does not allege that Karony participated in, or was aware of, these transactions
Despite the fact that also in that very same indictment it specifically goes over how Karony instructed Thomas Smith to remove & divert LP funds and perform market manipulation.
This was when I knew that John had no chance of wriggling out of the charges if his lawyers were this bad.
The motion to dismiss charges based on this defense was denied.
3. The Blockchain is public.
This argument formed when Karony enlisted an alleged "Blockchain expert" as an expert witness on his behalf. This "expert witness" called Mizrach stated the following:
"Any user with access to the internet could have known that not all of the liquidity in the LP pool had been locked and that the Deployer wallet was making withdrawals"
Let's break down this attempted defense. So Karony & Safemoon get to tell people in black and white:
Locked Liquidity Pool = Untouchable and #SAFU
Tonight the CEO of #SAFEMOON locks $250 MILLION+ DOLLARS WORTH OF LP
Later on, Karony becomes more explicit. His counsel writes that Safemoon owned all assets in the Liquidity Pool.
Karony then becomes crystal clear
What he is saying here is Safemoon was able to take the Liquidity they promised investors was locked, and sell it to Bitmart, and that that revenue is legitimate and therefore no fraud was committed.
You don't need to throw that in to ChatGPT to surmise how fucking dumb that argument is.
The best part is that Karony's defense have repeatedly tried to stall the trial because the Government hasn't handed over blockchain records which allege the fraud. The Government simply responded back with "It's on the blockchain, which is public!"
The motion to dismiss charges based on this defense was denied.
4. NYC Investors were akin to people trying to buy North Korean Nukes
You might be forgiven for thinking I've had a seizure at my keyboard. No, no, really. That is an argument Karony put forth in court.
Let's do a bit of context.
As the Government is bringing its case in NYC, some of the wording focuses on NYC-based investors. The defense jumped on this because you may remember that Crypto users in NYC faced serious challenges in acquiring Cryptocurrencies, often requiring the use of VPN's to bypass state-level access blocks to sites like Coinbase and Binance.
This is an actual quote from Karony's legal counsel as they try to argue that NYC investors were not 'reasonable' because they used a VPN to purchase Safemoon:
The Court should be wary of treating all VPN-acquiring investors as 'reasonable.' The mere fact that residents of New York, Cuba, Iran, North Korea, or elsewhere used VPNs to obtain access to a particular investment does not necessarily suggest that the resulting purchases were reasonable. One does not become a 'reasonable investor' in uranium simply by purchasing fissile material from North Korea via VPN.
Fucking. Insanity.
The motion to dismiss charges based on this defense was denied.
So there you have it. Trial in a week, and John Karony stands alone. His co-conspirator Thomas Smith has flipped against him. His first legal counsel bailed when he ran out of money. His family stand against him after he attempted to sue his own Mother through 22-23.
And all he has to fall back on are the above extremely flimsy, pithy, substanceless arguments.
Each charge has a maximum penalty of 20 years in prison. Realistically, John Karony could be facing 20-25 years behind bars for his crimes.
