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The cryptocurrency world, often touted as a realm of innovation and financial freedom, has witnessed its share of controversies and scandals. At the same time, the U.S. Department of Justice (DOJ) has revealed an indictment against SafeMoon creator Kyle Nagy, CEO John Karony, and CTO Thomas Smith, charging them with conspiracy to commitAmong the most notable is the saga of SafeMoon, a digital asset that promised to revolutionize decentralized finance (DeFi) but ultimately crashed amid allegations of fraud and mismanagement.At the heart of this narrative is Thomas Smith, the former Chief Technology Officer (CTO) of SafeMoon LLC, whose name is now synonymous with the project's downfall.This article delves deep into the legal battles, accusations, and eventual guilty plea of Thomas Smith, exploring the events that led to the collapse of SafeMoon and the consequences for its investors. Former SafeMoon CTO, Thomas Papa Smith, was the only person who responded to Findeisen's claims stating that funds were taken from the locked liquidity pool before Karony's appointment. He sent Smith evidence of this in the form of a blockchain transaction showing an outflow of 36.7 trillion tokens from the liquidity pool, dated .We'll examine the charges against Smith, the roles of his co-defendants, the alleged fraudulent activities, and the wider implications for the cryptocurrency industry. An indictment was unsealed today in federal court in Brooklyn charging Braden John Karony, Kyle Nagy, and Thomas Smith with conspiracy to commit securities fraud, conspiracy to commit wire fraud and money laundering conspiracy for their roles in defrauding investors in a decentralized finance digital asset called SafeMoon (SFM) that was issued by their company SafeMoon LLC.Prepare to uncover the intricate details of a crypto dream turned nightmare, and the crucial lessons learned from the SafeMoon debacle and the actions of figures like Thomas Smith.

The Indictment and Charges Against Thomas Smith

In November 2025, the U.S. SafeMoon CTO Thomas Smith pleaded guilty to conspiracy charges in a multimillion-dollar crypto fraud case. Prosecutors allege Smith and other executives misappropriated over $200 million in investor funds for personal luxury purchases. Smith faces up to 25 years in prison, while SafeMoon s CEO awaits trial amid ongoing legal challenges.Department of Justice (DOJ) unsealed an indictment that sent shockwaves through the crypto community.The indictment named three key figures in the SafeMoon ecosystem: Braden John Karony, the CEO; Kyle Nagy, the creator; and Thomas Smith, the CTO. SafeMoon, which is affiliated with a token by the same name, CTO Thomas Smith and creator Kyle Nagy misappropriated millions in investor assets and lied to customers. However, Nagy was chargedThe charges were severe, alleging a conspiracy to commit securities fraud, conspiracy to commit wire fraud, and money laundering conspiracy. Novem An indictment was unsealed today in federal court in Brooklyn charging Braden John Karony, Kyle Nagy, and Thomas Smith with conspiracy to commit securities fraud, conspiracy to commit wire fraud and money laundering conspiracy for their roles in defrauding investors in a decentralized finance digital asset called SafeMoon (SFM) that was issued by their companyThese charges stemmed from their alleged roles in defrauding investors in SafeMoon (SFM), a decentralized finance digital asset.

The Securities and Exchange Commission (SEC) also filed charges against SafeMoon LLC, SafeMoon US LLC, Karony, Nagy, and Smith, accusing them of perpetrating a massive fraudulent scheme through the unregistered sale of the SafeMoon crypto asset security. Safemoon CTO Thomas Smith has pleaded guilty to charges in a $200 million crypto fraud case. US authories arrested the Safemoon exec, alongside CEO Braden John Karony, in 2025. Thomas Smith, the chief technology officer of SafeMoon LLC, has pleaded guilty to two charges of securities fraud conspiracy and wire fraud conspiracy.The SEC's complaint painted a picture of deliberate deception and misappropriation of investor funds.

• Securities Fraud: Allegedly misleading investors about the safety and security of their investments.
• Wire Fraud: Using electronic communications to execute a fraudulent scheme.
• Money Laundering: Concealing the source of illegally obtained funds.

These charges highlighted the severity of the allegations against Thomas Smith and his co-defendants, signaling a significant legal battle ahead.

Thomas Smith's Guilty Plea: A Turning Point

Initially, Thomas Smith pleaded not guilty to the criminal charges.However, in a dramatic turn of events, he later decided to change his plea. The founder and two top executives at SafeMoon, whose namesake crypto token was once valued at more than $8 billion, have been charged by the U.S. Department of Justice with running a fraud thatHe admitted guilt to two conspiracy-related charges, specifically wire fraud conspiracy and money laundering charges. Braden John Karony, Kyle Nagy, and Thomas Smith have been charged with conspiracy to commit securities fraud, conspiracy to commit wire fraud, and money laundering, all linked to their roles with the SafeMoon cryptocurrency project. The criminal complaint claims that the defendants and theirThis plea marked a significant turning point in the case, potentially influencing the outcomes for Karony and Nagy.

By pleading guilty, Smith acknowledged his involvement in the alleged $200 million crypto fraud scheme.This admission also opened the door for him to potentially cooperate with prosecutors, providing valuable information about the inner workings of SafeMoon and the roles of his co-defendants.This cooperation could significantly impact their respective legal fates.

The Implications of the Guilty Plea

• Potential reduced sentence for Smith.
• Increased pressure on Karony and Nagy to defend themselves.
• Greater transparency into the alleged fraudulent activities within SafeMoon.

The $200 Million Crypto Fraud Scheme: Allegations and Evidence

Prosecutors allege that Smith, Karony, and Nagy misappropriated over $200 million in investor funds for personal luxury purchases.This accusation forms the core of the fraud scheme, highlighting the alleged misuse of investor capital for personal enrichment.

The alleged fraudulent activities included:

• Misappropriation of Funds: Diverting investor funds for personal expenses, such as real estate and luxury vehicles.
• False Claims About Liquidity Pools: Deceiving investors by falsely claiming that the token's liquidity was locked, implying a secure and stable investment.
• Manipulation of Token Value: Engaging in activities to artificially inflate the price of SafeMoon, misleading investors about its true value.

One notable example cited by prosecutors was the purchase of a custom Porsche 911 using investor funds, showcasing the alleged lavish spending by SafeMoon executives. Karony was charged in November 2025, together with SafeMoon executives, Kyle Nagy and Thomas Smith. The charges were levied for running a US$200 million crypto scam scheme. Prosecutors say they deceived investors regarding the safety of the locked liquidity feature of the SafeMoon (SFM) token while diverting money for personal use.This visual representation of the alleged misuse of funds further fueled public outrage and scrutiny.

The Role of Thomas Smith in the SafeMoon Ecosystem

As the Chief Technology Officer (CTO) of SafeMoon, Thomas Smith held a critical position within the company.His responsibilities encompassed overseeing the technical aspects of the SafeMoon project, including the development and maintenance of the blockchain, smart contracts, and other technological infrastructure.Given his technical expertise, Smith's involvement in the alleged fraudulent scheme raises significant questions about his knowledge and participation in the alleged manipulation of the system.

One of the key features of SafeMoon's smart contract was a 10% tax on every transaction.This tax was automatically deducted from each transaction, with a portion supposedly allocated to liquidity pools, another portion burned to reduce the token supply, and the remainder distributed to existing holders.However, prosecutors allege that these mechanisms were manipulated to divert funds for personal use, undermining the promised benefits to investors.Smith's role as CTO would have given him intimate knowledge of these mechanisms and the ability to influence their operation.

Smith's Technical Expertise and Alleged Involvement

Given his background in programming and computing, Smith possessed the technical skills necessary to understand and potentially manipulate the SafeMoon smart contract. The Securities and Exchange Commission today charged SafeMoon LLC, its creator Kyle Nagy, SafeMoon US LLC, and the companies Chief Executive Officer, John Karony, and Chief Technology Officer, Thomas Smith, for perpetrating a massive fraudulent scheme through the unregistered sale of the crypto asset security, SafeMoon.His guilty plea suggests that he was aware of and participated in the alleged fraudulent activities, raising serious questions about his ethical and professional conduct.

The Legal Fallout: Sentencing and Trial of Co-Defendants

Following his guilty plea, Thomas Smith faces a potential prison sentence of up to 25 years.The severity of the sentence reflects the gravity of the charges against him and the potential impact of his actions on investors.

Meanwhile, Braden John Karony, the CEO of SafeMoon, has pleaded not guilty and is awaiting trial.His trial is slated to begin at the end of the next month, presenting a significant legal challenge for the former executive.Karony's defense team will likely argue against the accusations, potentially pointing fingers at other individuals involved in the project.

Kyle Nagy, the creator of SafeMoon, remains at large and is believed to have potentially fled the country. SafeMoon CEO Johnny Karony and CTO Thomas Smith have been arrested. The executive team at SafeMoon withdrew more than $200m from the project. Along with creator Kyle Nagy, who is still at large, the three execs face charges from both the DOJ and SEC. Crypto and fraud have become so linked that the industry may never recover its image.His absence further complicates the legal proceedings and raises questions about his role in the alleged fraud scheme.

Current Status of Key Individuals

• Thomas Smith: Awaiting sentencing after pleading guilty.
• Braden John Karony: Awaiting trial after pleading not guilty.
• Kyle Nagy: At large, potentially having fled the country.

SafeMoon's Tokenomics and the 10% Tax: A Critical Analysis

SafeMoon's tokenomics were a central element of its marketing strategy, promising a unique approach to incentivizing long-term holding and discouraging short-term trading.The 10% tax on each transaction was designed to:

1. Reward holders by distributing a portion of the tax to them.
2. Reduce the circulating supply through token burning.
3. Provide liquidity through the allocation of a portion of the tax to liquidity pools.

However, critics argued that this tax was unsustainable and ultimately detrimental to the token's long-term viability.Moreover, the allegations of fraud suggest that the promised benefits of the tax were not realized, as funds were allegedly diverted for personal use.

For example, if someone transferred 10 SafeMoon tokens, 1 token would be taken as tax.The original idea was that this one token would be burned or distributed among holders, thereby increasing the value of their holdings.However, according to the charges, these tokens were sometimes diverted.

The Controversy Surrounding the Tax Structure

• Unsustainable economic model
• Disincentive for trading and adoption
• Potential for manipulation and fraud

The Community's Reaction and SafeMoon's Rebranding

The SafeMoon community, once a vibrant and enthusiastic group of supporters, has been deeply affected by the allegations of fraud and the legal troubles of its executives.Many investors have lost significant amounts of money, leading to anger, disillusionment, and a loss of trust in the project.

In an effort to salvage the project and distance itself from the negative publicity, the SafeMoon community has taken over the project and rebranded it as a memecoin. Through the operation of SafeMoon s smart contract, every transaction in SafeMoon was automatically subject to a 10% tax, meaning, for example, that if a holder of SafeMoon transferred 10 SafeMoon to another user, 1 SafeMoon would automatically be retained from the transfer as a tax and the remaining 9 SafeMoon would be received by the otherThis rebranding reflects a shift in strategy, focusing on community-driven development and a less ambitious vision for the future.

The Challenges of Rebuilding Trust

• Restoring investor confidence after the fraud allegations.
• Demonstrating transparency and accountability in project management.
• Overcoming the negative reputation associated with the SafeMoon brand.

Lessons Learned: Key Takeaways from the SafeMoon Scandal

The SafeMoon scandal serves as a cautionary tale for the cryptocurrency industry, highlighting the risks associated with unregulated digital assets and the importance of due diligence. Former Safemoon Chief Technology Officer (CTO) Thomas Smith has pleaded guilty to charges related to a $200 million fraud scheme tied to the controversial crypto project. On Feb. 20, investigative YouTuber Stephen Findeisen, known as Coffeezilla, reported the development, recalling that he had exposed Safemoon s fraudulent practices threeHere are some key takeaways:

• Transparency is crucial: Crypto projects must be transparent about their operations, tokenomics, and use of funds.
• Due diligence is essential: Investors should thoroughly research projects before investing, understanding the risks involved.
• Regulation is needed: The cryptocurrency industry needs clear and effective regulations to protect investors and prevent fraud.
• Trust is paramount: Crypto projects must prioritize building and maintaining trust with their communities.

The case of Thomas Smith and SafeMoon underscores the need for greater accountability and oversight in the cryptocurrency space. A New Hampshire man and former executive of the defunct crypto firm Safemoon who in September asked the federal court to dismiss his criminal charges in an Thomas Papa Smith, 36, ofBy learning from these mistakes, the industry can work towards creating a more secure and trustworthy environment for investors.

The Role of Investigative Journalism: Coffeezilla's Expose

The SafeMoon saga wouldn't be complete without acknowledging the contribution of investigative journalist Stephen Findeisen, better known as Coffeezilla.Months before the formal indictments, Coffeezilla released a series of videos exposing alleged fraudulent practices within SafeMoon. SafeMoon CTO Thomas Smith pleaded guilty to securities and wire fraud conspiracy in a $200M crypto fraud case. Co-defendants include CEO Braden Karony, who pleaded not guilty, and creator Kyle Nagy, who remains at large. Smith faces up to 45 years in prison, while Karony s trial is set for April 7.These investigations highlighted inconsistencies in the team's claims, questionable financial transactions, and potential misuse of investor funds. SafeMoon chief technology offer Thomas Smith told a judge he ll plead guilty to two conspiracy-related charges in a case prosecutors allege involves a $200 million crypto fraud scheme.Coffeezilla's work brought these issues to a wider audience and likely contributed to increased scrutiny from regulatory bodies.

Thomas Smith, notably, was the only member of the original SafeMoon team to respond directly to Coffeezilla's allegations. Prosecutors accused SafeMoon executives of misappropriating investor funds for personal use. Authorities revealed that SafeMoon leaders falsely claimed liquidity pools were locked. Thomas Smith, the Chief Technology Officer of SafeMoon LLC, pleaded guilty to securities fraud conspiracy and wire fraud conspiracy. His admission follows anHe even provided evidence of a blockchain transaction showing an outflow of 36.7 trillion tokens from the liquidity pool prior to Karony's appointment, suggesting potential wrongdoing even before Karony took the helm. SafeMoon CTO Thomas Smith is attempting to reverse his non-guilty plea on criminal charges related the company s crypto fraud scheme. Smith and co-defendants Kyle Nagy and Braden John Karony were indicted back in November 2025. Karony s trial is slated to begin at the end of the next month.While this doesn't excuse Smith's own admitted involvement, it adds another layer of complexity to the narrative.

The Impact of Citizen Journalism

• Increased public awareness of potential fraud.
• Greater pressure on regulatory bodies to investigate.
• Empowerment of investors to demand transparency and accountability.

The Wider Implications for the Cryptocurrency Industry

The SafeMoon case, along with other high-profile crypto scams, has had a significant impact on the reputation of the cryptocurrency industry as a whole. Thomas Smith, SafeMoon s former CTO, played a pivotal role in exposing the fraud. Accepting a plea bargain in February 2025, Smith testified that the team engaged in intentional dishonesty, manipulating liquidity pools and misrepresenting the project s financial health to inflate token prices.It has fueled skepticism among potential investors and raised concerns about the lack of regulation and oversight in the space.

The need for greater regulation is becoming increasingly clear, as regulators around the world grapple with how to protect investors from fraudulent schemes and ensure the stability of the cryptocurrency market. Braden John Karony, Kyle Nagy and Thomas Smith, executives of the Utah-based cryptocurrency company SafeMoon, are charged with fraud and misleading investors. Karony was arrested in Provo. Braden John Karony and his two colleagues spent investor funds on real estate and luxury cars, including a custom Porsche 911, prosecutors say.The SafeMoon case serves as a stark reminder of the potential consequences of unregulated digital assets and the importance of investor protection.

Addressing the Challenges of Regulation

• Balancing innovation with investor protection.
• Developing clear and consistent regulatory frameworks.
• Enforcing regulations effectively to deter fraudulent activity.

The Future of SafeMoon: Community-Driven Efforts

Despite the challenges and controversies, the SafeMoon community has demonstrated resilience and determination to rebuild the project.The community-led efforts to rebrand SafeMoon as a memecoin reflect a desire to move forward and create a new identity for the project.

However, the task of restoring trust and attracting new investors remains a significant hurdle. Meanwhile, co-conspirator Thomas Smith previously pleaded guilty and is also awaiting sentencing, while Kyle Nagy, the third alleged participant, remains at large. Meanwhile, the SafeMoon project has been taken over by the community which has rebranded it as a memecoin. Karony orchestrated a deceptive schemeThe SafeMoon community will need to demonstrate transparency, accountability, and a commitment to ethical practices in order to overcome the negative legacy of the past.

Strategies for Rebuilding SafeMoon

• Focusing on community-driven development and governance.
• Implementing transparent and auditable financial practices.
• Engaging with regulators and complying with legal requirements.

Thomas Smith Safemoon: A Summary and Looking Ahead

The story of Thomas Smith and SafeMoon is a complex and cautionary tale of ambition, deception, and legal consequences.From promising a revolutionary approach to DeFi to facing charges of fraud and conspiracy, the SafeMoon saga highlights the risks and challenges of the cryptocurrency industry.Smith's guilty plea marks a significant chapter in this story, but the legal proceedings against his co-defendants and the efforts to rebuild SafeMoon are ongoing.

The lessons learned from the SafeMoon scandal are invaluable for investors, regulators, and the cryptocurrency industry as a whole. Nagy, known as Safemoon Dev, 35; Karony, CPT_HODL_T_MUN, 27; and Smith, known as papa, 35, were charged with conspiracy to commit securities fraud, conspiracy to commit wire fraud and moneyBy prioritizing transparency, due diligence, and ethical practices, the industry can work towards creating a more secure and trustworthy environment for all participants.The case of Thomas Smith serves as a reminder of the importance of accountability and the potential consequences of fraudulent behavior in the world of digital assets.

What's next for Thomas Smith and the remaining figures involved in the SafeMoon controversy?Only time will tell. Chief Technology Officer Thomas Smith, 35, was arrested in New Hampshire. Founder Kyle Nagy, 35, remains at large and has possibly fled the country, according to court documents filed Thursday.However, one thing is clear: the SafeMoon story will continue to serve as a cautionary tale for the burgeoning cryptocurrency industry.

Key Takeaways:

• SafeMoon executives, including Thomas Smith, were charged with conspiracy to commit securities fraud, wire fraud, and money laundering.
• Thomas Smith pleaded guilty to conspiracy-related charges.
• Over $200 million in investor funds were allegedly misappropriated for personal use.
• The SafeMoon community has rebranded the project as a memecoin.
• Transparency, due diligence, and regulation are crucial for the cryptocurrency industry.

Disclaimer: This article is for informational purposes only and does not constitute legal or financial advice. Nagy was charged by the SEC on Novem, alongside SafeMoon CEO John Karony and Chief Technology Officer Thomas Smith for perpetrating a massive fraudulent scheme through the unregisteredAlways consult with a qualified professional before making any investment decisions.