SafeMoon CTO pleads guilty to $200M fraud conspiracy

Thomas Smith, the Chief Technology Officer (CTO) of SafeMoon LLC, has changed his plea to guilty on charges related to a multimillion-dollar cryptocurrency fraud scheme.

According to a February 20 court filing, Smith appeared in a Brooklyn federal court before Magistrate Judge Cheryl Pollak, withdrawing his previous not-guilty plea.

He now pleads guilty to conspiracy to commit securities fraud and conspiracy to commit wire fraud.

Judge Pollak has recommended that District Judge Eric Komitee accept the new plea.

The charges stem from allegations brought forth by the Justice Department and the Securities and Exchange Commission (SEC) in November 2023 against Smith, SafeMoon (CRYPTO:SFM) CEO Braden John Karony, and creator Kyle Nagy.

The trio is accused of falsely claiming to investors that SafeMoon's (SFM) liquidity was locked and inaccessible while allegedly diverting over $200 million for personal use, including luxury vehicles and real estate.

The SEC stated that SafeMoon's price skyrocketed by over 55,000 percent between March 12 and April 20, 2021, reaching a market capitalisation exceeding $5.7 billion before plummeting nearly 50 percent upon the revelation that its liquidity pool was not locked as claimed.

Smith faces a maximum sentence of 20 years in prison for wire fraud conspiracy and up to 25 years for securities fraud conspiracy.

Karony, who has pleaded not guilty, requested a delay in his criminal trial, which Judge Komitee denied, setting the trial to begin on April 7.

Kyle Nagy remains at large and is reported to have resurfaced in Russia.

The SEC's initial complaint was filed in the U.S. District Court for the Eastern District of New York, charging the defendants with violating registration and anti-fraud provisions.

At the time of reporting, the SafeMoon (SFM) price was $0.00005323.