SafeMoon’s CTO Admits Guilt in Crypto Scam

Thomas Smith, CTO of the then crypto firm SafeMoon, has pleaded guilty to fraud charges. He took part in a scheme that deceived investors and caused losses

The former CTO of SafeMoon, Thomas Smith, has pleaded guilty to two counts of fraud in a scheme that deceived investors and led to losses of over $200 million. Smith, who was charged by the U.S. Securities and Exchange Commission (SEC) and the Department of Justice, admitted guilt during a court session on Friday.

The SEC had accused SafeMoon's CEO Braden John Karony, Nagy, and Smith of fraud, conspiracy, and money laundering in November. The agency claimed that the token was sold as unregistered crypto securities.

According to the SEC, Karony, Nagy, and Smith abused their positions to inflate SafeMoon's value to $5.7 billion through fake trades, false marketing, and lying about the duration of the liquidity lock.

The SEC alleged that while assuring investors that the token was "Safe to the moon," its leaders secretly withdrew $200 million for personal luxuries like lavish cars and real estate.

The asset's value soared by over 55,000% between March and April 2021, before halving later on. Investors eventually realized that the team had made false claims about the liquidity pool lock and had used funds they claimed were protected.

Smith initially pleaded not guilty to the charges, but on Friday, he changed his plea to guilty on both counts before Magistrate Judge Cheryl Pollak. Pollak will recommend the guilty plea to U.S. District Judge Eric Komitee, who is overseeing the case.

If the plea is accepted, Smith faces a maximum sentence of 20 years for wire fraud conspiracy and a potential 25 years for securities fraud conspiracy. Judge Komitee will determine the final sentence based on the severity of the crimes and Smith's cooperation in the investigation.

Meanwhile, Karony has denied the allegations and previously attempted to have them dismissed. His efforts to delay the trial were unsuccessful, and his case is set to begin with opening statements on April 7.