(2023)
SEC v. SafeMoon
Year
2023
Criminal or Civil
Civil (SEC case)
Year Resolved
Unresolved
Jurisdiction (Court/State)
U.S. District Court for the Eastern District of New York
Filed By
U.S. Securities and Exchange Commission (SEC)
Penalty/Fine (USD)
None imposed yet
Lawsuit Overview
Thomas Smith for a fraudulent scheme involving the unregistered sale of SafeMoon Tokens, deemed crypto asset securities, from March 2021. The defendants allegedly misled investors by claiming liquidity pool (LP) assets were “locked” for four years, while secretly withdrawing over $200 million for personal use, including luxury homes, cars, and travel. The token’s price surged over 55,000% from March 12 to April 20, 2021, reaching a $5.7 billion market cap, but plummeted nearly 50% after the LP’s accessibility was exposed. Karony and Smith allegedly manipulated the market through large purchases and wash trading. The SEC alleges violations of Sections 5(a), 5(c), and 17(a) of the Securities Act, Sections 9(a)(2) and 10(b) of the Exchange Act, and Rule 10b-5. A parallel DOJ criminal action was filed. The case remains ongoing as of May 2025.
Category
Unregistered Securities Offering, Fraud, Market Manipulation
Notable Individuals Involved
Kyle Nagy (founder), Braden John Karony (CEO), Thomas Glenn Smith (CTO), Oren Gleich (SEC attorney), Dean M. Conway (SEC attorney)
Investor Loss Estimate
Billions in market capitalization lost; over $200 million misappropriated by defendants
Final Outcome
Ongoing as of May 2025
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