The Rise and Fall of Safemoon’s Former CTO
Former Safemoon Chief Technology Officer (CTO) Thomas Smith has recently pleaded guilty to charges related to a $200 million fraud scheme tied to the controversial crypto project. This marks a significant development in the ongoing saga surrounding Safemoon and its leadership team.
A History of Deception
On Feb. 20, investigative YouTuber Stephen Findeisen, also known as Coffeezilla, reported the news, highlighting his past involvement in exposing Safemoon’s fraudulent practices three years ago. Despite initial dismissals of concerns as mere fear, uncertainty, and doubt (FUD), Smith has now come forward and admitted to misleading investors about Safemoon’s liquidity.
Smith now faces a maximum sentence of 20 years for wire fraud conspiracy and 25 years for securities fraud. This serves as a sharp contrast to his previous not-guilty plea and underscores the severity of the charges against him.
SEC Crackdown on Safemoon
Smith’s guilty plea comes in the wake of the US Securities and Exchange Commission’s (SEC) crackdown on Safemoon’s leadership team back in November 2023. Alongside Safemoon CEO Braden John Karony and project creator Kyle Nagy, Smith was charged with multiple federal law violations, including fraud, conspiracy, and money laundering.
The SEC’s investigation revealed that the team had falsely marketed Safemoon as a secure investment with a locked liquidity pool. However, it was later discovered that they had unrestricted access to these funds, siphoning over $200 million for personal expenses, including luxury cars and real estate purchases.
Authorities also alleged that Safemoon executives manipulated trading activity to create a false sense of demand. While Smith has accepted guilt, Karony continues to deny the charges, and Nagy remains at large.
The Future of Safemoon
Despite the turmoil surrounding Safemoon, the project is undergoing a restructuring following its acquisition by a new entity. The new team has announced that the community now fully controls the project, signaling a shift towards a more transparent and community-driven approach.
As part of its revival strategy, Safemoon plans to launch a Solana-based memecoin that prioritizes engagement without a predefined utility. The project aims to embrace its meme coin roots, focusing on simplicity and a compelling idea that resonates with users on a deeper level.
Investors are advised to exercise caution as the project moves forward, with the team emphasizing the importance of waiting for the official contract address for the new token before making any investments.
