Thomas “Papa” Smith, the former Chief Technology Officer of SafeMoon LLC, pleaded guilty in February 2025 to two federal conspiracy counts in the SafeMoon Thomas Smith fraud case, admitting his role in a scheme that federal prosecutors say misappropriated more than $200 million in cryptocurrency from investors. He is awaiting sentencing in the U.S. District Court for the Eastern District of New York.
What Smith Did at SafeMoon
Smith was one of six founding members of SafeMoon and served as its Chief Technology Officer.1Union Leader. NH Man Pleads Guilty in SafeMoon Crypto Fraud That Cost Victims Millions SafeMoon’s token (SFM) launched in March 2021 and applied a 10% tax on every transaction, with half the proceeds meant to be deposited into “liquidity pools” that the company told investors were locked and inaccessible.
According to the SEC’s complaint, large portions of those pools were never locked. Smith and his co-defendants withdrew and misappropriated over $200 million in crypto assets and spent the money on luxury cars, homes, and travel. When public reports on April 20, 2021 revealed the pool was not actually locked and the token’s price fell by nearly 50%, prosecutors say Smith and CEO Braden John Karony used misappropriated assets to buy SafeMoon tokens and prop up the price.2SEC. SEC Charges SafeMoon and Top Executives With Fraud
Prosecutors singled out one transaction specific to Smith. They alleged he used cryptocurrency addresses he controlled to send 2,900 Binance Coin, valued at roughly $860,000 and traceable to SafeMoon’s liquidity pool, to a third party for the purchase of a custom Porsche 911 and a non-fungible token.3U.S. Department of Justice. Founders and Executives of Digital Asset Company Charged in Multi-Million Dollar Fraud
The Charges and Guilty Plea
A federal indictment unsealed on November 1, 2023 in the Eastern District of New York charged Smith, Karony, and co-defendant Kyle Nagy with conspiracy to commit securities fraud, conspiracy to commit wire fraud, and money laundering conspiracy.3U.S. Department of Justice. Founders and Executives of Digital Asset Company Charged in Multi-Million Dollar Fraud Smith, then 35, was arrested that day in Bethlehem, New Hampshire. The SEC filed a parallel civil complaint the same day alleging violations of the Securities Act of 1933 and the Securities Exchange Act of 1934.2SEC. SEC Charges SafeMoon and Top Executives With Fraud
Smith initially pleaded not guilty. On February 20, 2025, he appeared before Magistrate Judge Cheryl Pollak, withdrew that plea, and pleaded guilty to two of the three criminal counts: conspiracy to commit securities fraud and conspiracy to commit wire fraud. The securities fraud conspiracy count carries a statutory maximum of 25 years in prison, and the wire fraud conspiracy count carries a maximum of 20 years.4TradingView (Cointelegraph). SafeMoon CTO Changes Plea to Guilty in $200M Crypto Fraud Case The terms of Smith’s plea agreement, any cooperation with prosecutors, and the applicable sentencing guidelines range have not been publicly reported.
Where the Co-Defendants Landed
Karony went to trial and was convicted by a federal jury in May 2025 of conspiracy to commit securities fraud, wire fraud, and money laundering. On February 10, 2026, U.S. District Judge Eric Komitee sentenced him to 100 months in prison and ordered him to forfeit approximately $7.5 million and two residential properties, with restitution to victims still to be determined.5U.S. Department of Justice. CEO of Digital Asset Company SafeMoon Sentenced to 100 Months in Prison for Multi-Million Dollar Crypto Fraud
Nagy, whom prosecutors described as SafeMoon’s creator, fled the United States before the charges were unsealed. He is believed to have relocated to Moscow in April 2024 and remains a fugitive as of mid-2026.6RFE/RL. SafeMoon Co-Defendant Kyle Nagy Believed to Be in Russia
Sentencing Outlook
Smith is awaiting sentencing before Judge Komitee, the same judge who sentenced Karony.5U.S. Department of Justice. CEO of Digital Asset Company SafeMoon Sentenced to 100 Months in Prison for Multi-Million Dollar Crypto Fraud No sentencing date has been publicly scheduled. Karony received more than eight years after going to trial, and Smith’s sentence following a guilty plea could be lighter, though the specific terms and guidelines range remain undisclosed.