Safemoon executive pleads guilty in $200M fraud case as project pivots to memecoin strategy

Former Safemoon Chief Technology Officer (CTO) Thomas Smith has pleaded blameworthy to charges related to a $200 cardinal fraud strategy tied to the arguable crypto project.

On Feb. 20, investigative YouTuber Stephen Findeisen, known arsenic Coffeezilla, reported the development, recalling that helium had exposed Safemoon’s fraudulent practices 3 years ago. At the time, the task dismissed concerns arsenic baseless fear, uncertainty, and uncertainty (FUD).

However, Smith has present admitted to misleading investors astir Safemoon’s liquidity and faces a maximum condemnation of 20 years for ligament fraud conspiracy and 25 years for securities fraud.

Meanwhile, his admittance marks a displacement from his earlier not-guilty plea successful a lawsuit involving capitalist deception and misappropriation of funds.

However, the tribunal volition see his practice during the probe erstwhile determining his sentence.

SEC charges against Safemoon

Smith’s blameworthy plea follows the US Securities and Exchange Commission’s (SEC) November 2023 crackdown connected the crypto project’s enactment team, which included him, Safemoon CEO Braden John Karony, and task creator Kyle Nagy.

The fiscal bureau charged them with aggregate national instrumentality violations, including fraud, conspiracy, and wealth laundering.

The regulators accused them of falsely selling Safemoon arsenic a unafraid concern with a locked liquidity pool. However, the investigators aboriginal discovered that the squad had unrestricted entree to these funds, siphoning implicit $200 cardinal for idiosyncratic expenses.

Reports bespeak that the stolen wealth funded luxury cars, existent estate, and different high-end purchases.

Authorities besides alleged that Safemoon executives manipulated trading enactment to make a mendacious consciousness of demand. While Smith has admitted guilt, Karony continues to contradict the charges, and Nagy remains astatine large.

Safemoon memecoin

Smith’s blameworthy plea comes arsenic the task undergoes a restructuring pursuing its acquisition by a caller entity.

On Feb. 14, Safemoon’s caller squad announced that its assemblage afloat controls the project.

The squad plans to motorboat a Solana-based memecoin arsenic portion of its revival strategy. The task volition beryllium community-driven, prioritizing engagement without a predefined utility.

The task stated:

“SafeMoon is simply a meme coin. That’s what it should person been from time one. No convoluted promises, nary forced utility—just a movement. Because astatine the bosom of each legendary meme coin is simply a simple, compelling idea. A brand. A rallying outcry that radical link with connected a deeper level.”

Meanwhile, the squad has warned investors to stay cautious, emphasizing that they person not yet released the authoritative declaration code for the caller token.

The station Safemoon enforcement pleads blameworthy successful $200M fraud lawsuit arsenic task pivots to memecoin strategy appeared archetypal connected CryptoSlate.