New York prosecutors said for the trial of the CEO of Safemoon, Braden John Karony, despite a recent directive by the United States Ministry of Justice (DOJ) to reduce certain types of cryptography application measures. This development adds another layer to Karony’s problems after the accused lost his private council service due to insufficient funds to cover legal costs.
The crypto-friendly note does not save Karony from the trial
On April 7, the US sub-procurer general, Todd Blanche, published a service note ordered prosecutors to abandon all the proceedings related to digital assets intended for “persecution regulations”. This action has aligned itself on the wider friendly friendly policies in crypto implemented by the administration of American president Donald Trump.
In a recent legal file on April 18, John Durham, the Attorney General of the Oriental District of New York, confirmed the commitment of his office to maintain all the accusations against the director of Safemoon, John Karony, after having carried out an internal examination of the case following the memo of the Vice-Procureur General.
In November 2023, the Oriental District of New York announced an indictment against Karony alongside two other key people from Safemoon LLC – Kyle Nagy and Thomas Smith – for orchestrated a fraud program of one hundred million dollars.
Karony and his colleagues had expressed the SAFEMOON token (SFM) to investors with the promise of future profits. However, the defendants had lied to investors about the real status of the alleged liquidity functionality SFM LOCK. As SFM Investments grew, the three leaders have diverted user funds and diverted the SFM tokens from investors supposed to be up to 200 million dollars for personal use.
The American Commission for Securities and Exchange (SEC), which has filed a parallel action against the leaders of Safemoon, also accused the defendants of manipulation of prices following a drop in prices which resulted from investors of knowing the fraudulent regime.
Safemoon CEO could incur a long prison sentence
John Karony, alongside other defendants, faces accusations of conspiracy to commit securities fraud, money laundering and wire fraud. In particular, Karony and Smith were arrested in Utah and New Hampshire, respectively, while Smith remains in freedom.
However, Karony’s first lawyers, Petrillo Klein & Boxer, managed to obtain a deposit of $ 3 million before withdrawing from the case due to the accused’s inability to pay their services. John Karony should now face a trial with a new lawyer guaranteed by the law on criminal justice.
According to American laws, a single charge of fraud in wire or money laundering leads to a maximum sentence of up to 20 years in prison, while the securities fraud can cause up to five years. If he is found guilty of all accusations, Karony could hear a combined sentence of more than 40 years in federal prison.
Star image of John Karony on X, tradingView.com graphic
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