Thomas Smith, the Chief Technology Officer of the DeFi project SafeMoon, has admitted guilt on two counts in a $200 million cryptocurrency fraud case. This was reported by Cointelegraph, citing a court statement from February 20.
Smith changed his previous testimony and pleaded guilty to conspiracy to commit securities fraud and wire fraud.
Each charge carries a potential sentence of up to 20 and 25 years in prison, respectively.
In the 2023 case, the Department of Justice and the U.S. Securities and Exchange Commission (SEC) also charged SafeMoon CEO John Karony and project creator Kyle Nagy.
According to the investigation, SafeMoon’s leadership deceived buyers of the SFM token, issued on a public blockchain. Karony, Smith, and Nagy claimed that the asset’s liquidity was locked, while they had access to the funds.
Subsequently, approximately $200 million belonging to investors was allegedly used by the accused to purchase luxury real estate and cars, according to SEC and prosecutors.
The agencies also noted that SFM’s market capitalization reached $8 billion but nearly halved on April 20, 2021, when it was revealed that the token’s liquidity was not locked.
Smith and Karony were arrested in November 2023. Nagy disappeared, and his whereabouts are unknown.
Earlier, on February 20, a former employee of the payroll provider Bybit pleaded guilty to embezzling $5.7 million, mostly in cryptocurrency. She was arrested in April 2023.