Court delays ruling on bail for SafeMoon CEO

U.S. federal prosecutors paused the bail hearing for SafeMoon CEO John Karony. The court took into account authorities’ concerns about possible flight risk and “danger to the public”.

In early November, against the founders and executives of the DeFi project filed charges of fraud amounting to millions of dollars. According to law enforcement, Karony, Kyle Nagy and Thomas Smith defrauded holders of SFM tokens, siphoning coins from the liquidity pool.

On November 9, prosecutors challenged the magistrate’s decision to set bail at $500,000 for the SafeMoon CEO, because the release order had been issued “without accounting for the defendant’s substantial assets and his ability to flee”. The district court in New York subsequently overturned the prior order.

“If convicted, the defendant faces the maximum penalty provided by law of 45 years in prison. All these facts create strong incentives for the defendant to use his substantial (and opaque) holdings and overseas connections to avoid such an outcome,” the prosecutors warned.

They stressed that the SafeMoon chief provided “almost no information about his finances.” In the prosecutors’ view, he could access “assets totaling millions of dollars,” which was not taken into account by the court when ruling on bail.

Karony also has “substantial and growing” ties in Europe. According to investigators, his fiancée is a British citizen.

In addition, the SEC accused SafeMoon’s leadership of fraud and sales of unregistered securities. The agency claims that the company’s executives illegally diverted funds to purchase SFM tokens to support the asset’s price.

In March, the hacker withdrew assets from the DeFi protocol pool worth about $9 million, but said he wished to return the funds.