Safemoon Former CTO Admits Guilt in $200M Fraud Scheme

Thomas Smith, the former Chief Technology Officer of Safemoon, has pleaded guilty to charges connected to a massive $200 million fraud scheme. Smith, once a key figure in the crypto project, now faces a possible 45-year prison sentence for his role in deceiving investors. His confession comes after years of rumors and accusations, making a big change in the case against Safemoon’s leaders.

The Deception Behind Safemoon  

This confession comes years after YouTuber Stephen Findeisen, known as Coffeezilla, exposed Safemoon’s shady dealings. When these claims first surfaced in 2021, Safemoon’s team dismissed them as false accusations meant to spread fear and doubt. 

Safemoon, now defunct BNB Chain-based exchange, was marketed as a secure and promising investment with a locked liquidity pool, meaning investors’ funds were secured. Recall that in March 2023, SafeMoon announced that its liquidity pool was compromised by a hacker. 

The project’s leaders had full access to these funds and used them for personal gain.  Investigators discovered that over $200 million was taken from investors’ investments. This funds was spent on luxury cars, expensive real estate, and other lavish purchases. 

On top of that, authorities revealed that Safemoon executives manipulated trading activity to create the illusion of high demand. This made people believe the token was more valuable than it was.  

Smith’s confession proved that Coffeezilla’s suspicions were right and that investors were truly misled. 

A Bigger Crackdown on Safemoon’s Leaders  

Smith’s guilty plea follows a major legal crackdown on Safemoon’s leadership. In November 2023, the U.S. Securities and Exchange Commission (SEC) charged Smith, CEO Braden John Karony, and project creator Kyle Nagy with fraud, conspiracy, and money laundering.  

While Smith has now admitted to his crimes, Karony still denies the charges, and Nagy is nowhere to be found. The court will take Smith’s cooperation into account when deciding his sentence. Notably, his confession has already confirmed the large-scale fraud that investors had long suspected.  

In a recent report, former SafeMoon CEO Braden John Karony seeks to delay his trial. He hopes President Trump’s changing crypto policies could help dismiss a charge against him.

Safemoon Plans To Focus On Memecoin

Safemoon is trying to make a fresh start after its past problems. Reportedly, a new team is now in charge of the project, taking a different path. Last week, the new team announced that the community will fully control Safemoon. 

Their new plan is to launch a memecoin on the Solana blockchain. Even with these changes, the team urges investors to be careful and stay alert for imposters. This is because the official contract address for the new token has not yet been released.