Former Safemoon Chief Technology Officer (CTO) Thomas Smith has confessed to his involvement in a $200 million fraud scheme linked to the controversial crypto project. This revelation comes after investigative YouTuber Stephen Findeisen, also known as Coffeezilla, exposed Safemoon’s fraudulent activities three years ago.
Initially, Safemoon brushed off the allegations as baseless FUD, but Smith’s guilty plea now confirms the deceptive practices that misled investors about the project’s liquidity. Smith faces a potential maximum sentence of 20 years for wire fraud conspiracy and 25 years for securities fraud. While he had previously pleaded not guilty, his cooperation in the investigation will be taken into consideration during sentencing.
The Securities and Exchange Commission (SEC) had already taken action against Safemoon’s leadership team in November 2023, charging Smith, CEO Braden John Karony, and project creator Kyle Nagy with various federal law violations, including fraud, conspiracy, and money laundering. The SEC alleged that the team falsely marketed Safemoon as a secure investment with a locked liquidity pool, only to discover that the funds were being misappropriated for personal expenses, totaling over $200 million.
Luxury cars, real estate, and high-end purchases were reportedly funded by the stolen money, while authorities also accused Safemoon executives of manipulating trading activity to create artificial demand. Despite Smith’s guilty plea, Karony maintains his innocence, and Nagy remains at large.
As Safemoon undergoes a restructuring following its acquisition by a new entity, the project’s new team has announced that the community now fully controls its direction. In an effort to revive the project, Safemoon plans to launch a Solana-based memecoin that will be community-driven, focusing on engagement without a predefined utility.
Emphasizing Safemoon’s roots as a meme coin, the team stated, “SafeMoon is a meme coin. That’s what it should have been from day one. No convoluted promises, no forced utility—just a movement.” However, investors are cautioned to exercise caution as the official contract address for the new token has not been released yet.
In conclusion, Safemoon’s turbulent journey continues as it navigates through legal challenges, leadership changes, and a renewed focus on community-driven initiatives. The project’s future remains uncertain, but the commitment to transparency and accountability will be crucial in rebuilding trust among investors and stakeholders.