Thomas Smith, the Chief Technology Officer (CTO) of SafeMoon LLC, has pleaded guilty to two charges related to a multimillion-dollar cryptocurrency fraud scheme, according to a court filing dated February 20, 2025.

The plea represents a considerable advance in a highly publicized case pursued by U.S. prosecutors and the Securities and Exchange Commission (SEC).

Smith appeared before Magistrate Judge Cheryl Pollak in a Brooklyn federal court to retract his earlier not-guilty plea. He confessed to charges pertaining to conspiracy to commit securities fraud and conspiracy to commit wire fraud.

Judge Formally Accepts New Plea

Judge Pollak has suggested that U.S. District Judge Eric Komitee, who is overseeing the case, officially acknowledge the new plea.

If found guilty, Smith could face a maximum of 25 years in prison for the securities fraud conspiracy charge and up to 20 years for the wire fraud conspiracy charge.

The allegations stem from a joint investigation by the Department of Justice (DOJ) and the SEC, which in November 2023 accused Smith, SafeMoon CEO Braden John Karony, and SafeMoon creator Kyle Nagy of misleading investors.

Prosecutors contend that the trio falsely assured purchasers of SafeMoon (SFM) tokens that the liquidity pool for the tokens was locked and inaccessible to company insiders.

“Three years ago we exposed SAFEMOON’s fraud. They told their community it was just ‘FUD’. Today their CTO Thomas Smith pled guilty.”
— Coffeezilla (@coffeebreak_YT) February 20, 2025

In reality, authorities assert that the executives misappropriated over $200 million in investor funds for personal expenditure, including luxury vehicles and real estate.

SafeMoon, once a favored token, reached a market capitalization between $5.7 billion and $8 billion before a significant collapse in value. On April 20, 2021, its worth dropped nearly by half when reports surfaced that the liquidity pool was not secured as previously claimed.

While Smith and Karony were detained following the charges, Nagy remains at large and is believed to have resurfaced in Russia. Karony has asserted his innocence, filing a motion to dismiss the charges in April 2023, which was rejected.

Earlier this month, Karony attempted to postpone his trial, citing potential changes in U.S. crypto regulation under President Donald Trump that could affect his case. However, Judge Komitee denied the request, scheduling the trial to start with opening statements on April 7.

SafeMoon CEO Faces Legal Struggles

Last year, Karony encountered legal difficulties as his defense team withdrew due to a lack of resources, resulting in him being assigned a public defender.

Prosecutors allege that Karony, along with Nagy and Smith, misappropriated millions from supposedly “locked” liquidity pools intended to protect customer funds. Instead, it is claimed that the trio redirected the money for personal indulgences, acquiring luxury items such as a custom Porsche and other high-end vehicles.

The U.S. Attorney’s Office condemned the executives for prioritizing personal wealth over investor trust, even though SafeMoon had attained an $8 billion valuation. Ivan J Arvelo of Homeland Security Investigations stated that the defendants’ avarice led to extensive financial harm to clients. Karony, currently out on a $3 million bail, does not have a confirmed date for his next court hearing.