SafeMoon grew to around an $8 billion market cap in 2021 using a 10% transaction tax mechanic designed to benefit holders. From that tax, half was designed to automatically redeploy to token holders, while the other half was supposed to enter liquidity pools to strengthen trading of the asset.
But Karony was found to have diverted and misappropriated funds designed for those liquidity pools, defrauding investors in the token by maintaining access to what they thought were “locked” tokens.
“He deceived investors, using their funds to lavishly expand his portfolio with million-dollar homes and luxury cars,” IRS-CI New York Special Agent in Charge Harry Chavis said in a statement. “By employing complex transactions to obscure the movement of these illicit proceeds, Karony acquired over $9 million in crypto assets.”
A third alleged co-conspirator, Kyle Nagy, remains at large according to the United States Attorney’s Office of the Eastern District of New York.
