SafeMoon CEO Seeks Dismissal of Charges Amid DOJ Directive Shift
Braden John Karony, CEO of SafeMoon, is pushing for the dismissal of charges filed against him and his firm, using a recent shift in U.S. Department of Justice (DOJ) policy as the key argument.
In an April 9 letter to New York federal court judge Eric Komitee, Karony’s attorney, Nicholas Smith, argued that the DOJ’s April 7 memo, which disbanded its crypto unit, should play a role in the court’s decision to dismiss the case. The memo, issued by U.S. Deputy Attorney General Todd Blanche, outlined the DOJ’s new stance on crypto-related cases.
Key DOJ Memo Shifts Approach on Crypto Enforcement
The memo from Blanche confirmed that the DOJ would no longer pursue enforcement actions or litigation that attempt to impose regulatory frameworks on digital assets. In a significant shift, the DOJ also made it clear that it would not charge violations of securities and commodities laws when wire fraud charges are more applicable and do not require determining whether a digital asset is a security or commodity.
Blanche emphasized, “The Department of Justice is not a digital assets regulator,” further noting that the agency would steer clear of any charges that would involve determining the classification of a digital asset.
Exemption in DOJ’s New Directive
Karony’s legal counsel pointed out that while there is an exemption in the DOJ’s new policy for cases where parties wish to defend that a crypto asset is a security, Karony does not have such an interest in this case. Therefore, the attorney believes this directive should play a critical role in the dismissal of the charges against SafeMoon.
Background on SafeMoon Case
In November 2023, the DOJ and the Securities and Exchange Commission (SEC) filed charges against Karony, SafeMoon creator Kyle Nagy, and Chief Technology Officer Thomas Smith. The charges included securities violations, wire fraud, and money laundering, alleging that the SafeMoon executives misappropriated $200 million worth of assets from the project and misused investor funds.
Karony’s Efforts to Clear SafeMoon’s Name
Karony’s defense is centered on the recent shifts in DOJ policy and the growing perception that the legal framework around digital assets is still developing. His legal team hopes that the new directive will be a key factor in securing a dismissal, positioning SafeMoon as a firm in compliance with evolving regulatory standards.
This case marks a key moment in the ongoing legal landscape for cryptocurrency firms and their regulatory challenges.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a "detective-like" mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
