SafeMoon CEO is out on bail but could lose his lawyers

The NFT Unicorn b6a4dd1d-44f4-4f94-aad2-fc16ce989519 SafeMoon CEO is out on bail but could lose his lawyers Crypto News

The CEO of bankrupt crypto firm SafeMoon, Braden John Karony, has been released on bail but could be left in the hands of a public defender due to a “lack of funds to pay for private counsel.”

Karony has been embroiled in an alleged “multimillion-dollar international fraud scheme,” with the United States Justice Department charging Karony and his colleagues with securities, wire fraud and money laundering conspiracy in November 2023.

However, his lawyers — Petrillo Klein & Boxer — have been looking to withdraw as Karony’s counsel as early as Jan. 22, citing the SafeMoon CEO’s “apparent lack of funds” to pay for private counsel.

In a Feb. 12 filing, Petrillo partner Adam Schuman reiterated their earlier Jan. 22 motion to withdraw as counsel, explaining that SafeMoon once indicated it would compensate Karony’s legal fees but ultimately failed to deliver funds for the firm’s retainer and filed for bankruptcy.

Schuman also noted that a magistrate judge has appointed a public defender to Karony as of Feb. 9, with the two “now in direct communication.”

On Jan. 31, Judge Eric Komitee had ordered Karony’s lawyers to help him apply for a Criminal Justice Act lawyer — which gives counsel to defendants who can’t afford one — and he would “consider and likely grant” their application after, even though not paying legal fees is not usually basis enough to withdraw.

Karony finally gets bail

During a Feb. 9 hearing in New York, Magistrate Judge Taryn Merkl granted Karony bail and released him on a $3 million bond to detention at his parent’s Utah home, who signed on as his custodians, along with cyber and electronic monitoring and a ban on crypto promotional activities, according to a Law360 report.

Merkl reportedly denied Karony’s initially proposed $1 million bond, saying it was “totally insufficient,” and cited his reported access to millions of dollars worth of crypto.

However, Karony’s formerly Central Intelligence Agency-employed parents reportedly swayed Merkl to release their son. The pair said they supported Karony despite his mother, Jennifer Karony, saying she reported him to the Federal Bureau of Investigation and that they had fallen out due to a legal fight over a business dispute.

Prosecutors had rebuked the initial bail conditions, saying Karony’s past legal troubles with his parents could mean he wouldn’t care about leaving them “on the hook,” which Karony’s lawyers rebuffed, claiming the conflict was resolved.

They also claimed his ties to the United Kingdom — where Karony lived for two years and where his finance still resides, along with his access to millions worth of crypto — means he’s a flight risk.

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Merkl and prosecutors were eventually content with the new bail conditions, with the judge reportedly telling Karony he was “extremely lucky.”

“You will be back here in a heartbeat if something goes wrong, and I promise you: You won’t get bail again.”

U.S. prosecutors arrested and charged Karony and chief technology officer Thomas Smith on Oct. 31, 2023, with securities, wire fraud and money laundering conspiracy. SafeMoon creator Kyle Nagy was also charged but remains at large.

The U.S. Securities and Exchange Commission has also charged Karony, Nagy and Smith with fraud and unregistered securities sales.

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