- Prosecutors accused John Karony, former safemoon CEO, of making nearly 24 false claims to investors in early 2021.
- The prosecution used private messages and blockchain evidence to contrast Karony’s public and private statements.
- Evidence showed that Karony and associates withdrew nearly $43 million from the supposedly “locked” SafeMoon liquidity pool.
- Jurors heard about Karony instructing colleagues to hide their token holdings while denying ownership publicly.
- The defense will present closing arguments on May 20, with jury deliberations expected to begin shortly after.
The trial of John Karony, former head of SafeMoon, has featured testimony alleging he gave false information to investors. Prosecutors presented their case in a federal court beginning May 6, showing messages and financial transactions they say prove Karony misled the public about the cryptocurrency project’s finances.
According to Assistant U.S. Attorney Dana Rehnquist, Karony made close to two dozen “material lies” over several weeks in early 2021. The prosecution’s evidence included private communications indicating that Karony directed others to hide their token holdings, despite publicly claiming the team did not possess any tokens. Forensic analysts testified that between early September and mid-December 2021, Karony and others withdrew around $43 million from the allegedly “locked” SafeMoon liquidity pool on decentralized exchange Pancakeswap.
Rehnquist highlighted exchanges where Karony and confessed co-conspirator Thomas “Papa” Smith discussed spending large amounts of money, referring to “castle money” and “Lambos.” Prosecutors quoted a message from SafeMoon creator Kyle Nagy to Karony asking, “Should we be honest with the team about pulling [funds] out of the LP?” Karony responded, “Let’s draft up a statement… Thomas [Smith], you and I need to talk about how to massage that properly.” Prosecutors said no statement about these actions was ever released.
Prosecutors further showed that, while Karony told the public that executives were “getting paid a little bit”, internal records indicated that significant payouts were made directly from the company’s funds. Evidence presented included both blockchain forensic findings and internal discussions, which prosecutors argued directly contradicted public statements made by Karony.
The defense has stated Karony will not testify. Closing statements from the defense are scheduled for May 20. After jury instructions, deliberations are expected to begin the following day. For additional details and updates, readers may refer to Protos via X, Bluesky, Google News, and their YouTube channel.
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