SafeMoon CEO Requests Delay in Criminal Trial Amid Trump’s Proposed Crypto Policy Changes

Braden John Karony, the former CEO of the cryptocurrency firm SafeMoon, is seeking a delay in his criminal trial, potentially hoping for a shift in U.S. policy toward digital assets under the Trump administration. Karony faces securities fraud charges stemming from his involvement in the SafeMoon project, and his legal team is now requesting that the trial be pushed back from March to April 2025.

In a February 5 filing with the U.S. District Court for the Eastern District of New York (EDNY), Karony’s defense team cited “significant changes” being proposed by the Securities and Exchange Commission (SEC) under former President Donald Trump’s administration. Specifically, they referenced an executive order signed on January 23, 2025, which explored potential changes to the country’s digital asset regulations. Additionally, the legal team pointed to remarks made by SEC Commissioner Hester Peirce, suggesting that the commission could offer "retroactive relief" for certain cryptocurrency-related cases.

Karony's attorneys argue that, given these developments, the trial could be significantly impacted by changes to the regulatory landscape. They warn that under the current trial schedule, the parties involved could discover at the start of the trial that the U.S. Department of Justice (DOJ) no longer considers SafeMoon’s token, SFM, to be classified as a “security.” This classification is central to the charges against Karony, as the indictment claims that SafeMoon was operating as a security without proper registration. The defense also highlighted that such a shift in the regulatory approach could emerge during or immediately after the trial, potentially undermining the case.

The Charges Against SafeMoon’s Executives

In November 2023, federal authorities unsealed an indictment against Karony, SafeMoon’s Chief Operating Officer Kyle Nagy, and Thomas Smith, the company’s former Chief Financial Officer. The trio faces charges related to securities fraud conspiracy, wire fraud conspiracy, and money laundering conspiracy. According to the indictment, the defendants allegedly misappropriated millions of dollars' worth of SafeMoon's SFM tokens between 2021 and 2022, diverting the funds for personal gain.

Despite the defense’s request for a delay, the U.S. Attorney’s Office for EDNY filed an opposition letter on February 7, arguing that Karony’s motion was based on "aspirational regulatory policies" that have yet to be implemented. U.S. Attorney John Durham contended that even if Trump’s administration were to overhaul regulatory policies surrounding digital assets, it would not likely impact the core charges of wire fraud and money laundering conspiracy. These charges, Durham argued, are unrelated to the classification of SafeMoon as a security.

“The additional counts against Karony—conspiracy to commit wire fraud and money laundering—are unaffected by any potential changes in regulatory policies concerning digital assets,” Durham wrote. He further stated that there were no imminent regulatory changes that would justify delaying the trial and suggested that Karony's request should be denied.

Implications of Trump’s Influence on Crypto Cases

The future of crypto-related criminal cases in the U.S. may be in flux, particularly as Trump appointees are set to influence key positions. As of February 7, Durham was heading the EDNY office in an acting capacity after the departure of former U.S. Attorney Carolyn Pokorny. Trump has nominated Joseph Nocella Jr. to take over the office, raising questions about how future crypto enforcement cases will be handled. Similarly, in the Southern District of New York, prosecutors have indicated they may scale back crypto enforcement efforts, further complicating the legal landscape for companies and individuals in the space.

Karony’s Release and Next Steps

Karony, who has pleaded not guilty to all charges, was released on a $3 million bond in February 2024 while awaiting trial. His co-defendant, Kyle Nagy, reportedly fled to Russia after the charges were filed. As of now, the court has not determined when it will rule on Karony's request for a trial delay.

While the outcome of the request remains uncertain, the shifting political landscape surrounding digital asset regulation may play a pivotal role in the future of this case, and potentially the broader scope of crypto-related legal proceedings in the U.S.