SafeMoon CEO John Karony’s Bail On Hold as Feds Challenge Decision

• Judge LaShann DeArcy Hall halted the bail release order of SafeMoon’s CEO, Braden John Karony.
• The federal prosecutors highlighted Karony’s “substantial financial means and ability to flee.”
• SafeMoon’s CTO was also arrested but its creator, Kyle Nagy, is still on the run.

Judge LaShann DeArcy Hall of the U.S. District Court for the Eastern District of New York suspended the bail release order of SafeMoon’s CEO, Braden John Karony, on Thursday. This decision came after federal prosecutors challenged Utah Magistrate Judge Daphne A. Oberg’s approval of Karony’s release on $500,000 bail.

The prosecutors argued the magistrate’s oversight in granting SafeMoon CEO’s release on a half-a-million-dollar unsecured bond. They highlighted that the decision lacks “consideration of the defendant’s substantial financial means and ability to flee.”

The feds also claimed Karony’s ability to use his “significant wealth” to avoid a maximum prison sentence of 45 years if convicted. They stressed the importance of the detention as it is for the “safety of the community.”

Doubling down on arguments, the prosecutors underscored Karony’s feeble connection to the U.S., considering his frequent out-of-country flights. The Detention Memo further states:

Until his return to the U.S. on October 27, 2023, the defendant had been abroad for five consecutive months… As he reported to D. Utah Pre-Trial Services, he resides with his fiancée, a U.K. citizen and resident.

The outcome of the initial bail order would have entailed Karony’s confinement at his Miami home, where he would have been prohibited from performing activities relating to cryptocurrencies. Karony was arrested at Salt Lake City Airport alongside Chief Technology Officer Thomas Smith on October 31. However, SafeMoon’s creator, Kyle Nagy, is still on the run.

The Securities and Exchange Commission (SEC) has accused the trio of engaging in a substantial fraudulent scheme (i.e., withdrawal of crypto assets worth more than $200 million). They are charged with three counts of conspiracy for money laundering, securities fraud, and wire fraud.