Safemoon CEO John Karony has been found guilty of three major crypto fraud charges and could face 45 years in prison. The US Department of Justice (DOJ) announced that a Federal Jury in Brooklyn found Karony guilty of misappropriation of investor funds, money laundering, lying about locked liquidity, and looting investors’ funds.
Also Read: Shiba Inu: Shibarium Officially Burns 1 Billion SHIB Tokens
Karony and other Safemoon officials have been found guilty of all charges of crypto fraud. They are accused of deceiving Safemoon investors about the project’s liquidity pool. The executives lied about not having access to the liquidity pool, claiming it to be decentralized. However, they had access to the funds, used the liquidity pool, and laundered the money for their personal benefits.
Also Read: Uber: JPMorgan Raises Price Forecast for UBER Stock
Safemoon CEO John Karony Faces Up to 45 Years in Prison For Crypto Fraud
The CEO also used the diverted funds to buy residential properties worth millions of dollars. “The defendant agreed with his co-conspirators to lie to Safemoon investors about whether Safemoon executives could access the liquidity pool and whether they were using the assets from the liquidity pool for their personal benefit,” wrote the DOJ.
Also Read: Apple (AAPL) to Get Boost From $1.5B Foxconn Investment
The DOJ explained that Safemoon’s executives diverted funds from the liquidity pool as its market cap touched $8 billion. “As Safemoon’s market capitalization grew to more than $8 billion. The defendant fraudulently diverted and misappropriated millions of dollars’ worth of liquidity from the Safemoon liquidity pool for their personal benefit.”
The case was tried in the court for 12 days before the Jury passed the judgement on Wednesday. The CEO now faces up to 45 years in prison. “When sentenced, Karony faces up to 45 years in prison. The jury also issued a verdict to forfeit one residential property and the proceeds from the sale of another residential property, amounting to approximately $2 million,” the Justice Department noted.