Legal team of a company seeks to withdraw due to financial crisis
Braden John Karony, the former CEO of SafeMoon, a cryptocurrency firm that is no longer in operation, is facing a significant change in his legal situation as his legal representation, Petrillo Klein & Boxer, has filed a motion to withdraw from the case.
In November 2023, Karony was accused of securities fraud, wire fraud, and conspiracy to commit money laundering, alongside Thomas Smith, SafeMoon’s CTO. These allegations have prompted a major shift in Karony’s legal representation. Adam Schuman of Petrillo Klein & Boxer, in a filing on Feb. 12, explained their decision to withdraw from representing Karony.
This decision was influenced by SafeMoon’s failure to fulfill its promise of covering Karony’s legal fees, resulting in a shortage of funds for the firm’s retainer as SafeMoon filed for bankruptcy. Consequently, Karony has been assigned a public defender due to the financial shortfall, marking a significant change in his defense strategy.
On Feb. 9, Karony had a bail hearing that resulted in his release on a $3 million bond. The conditions set for his bail are particularly strict, including house arrest at his parents’ residence in Utah. Additionally, these terms involve cyber and electronic monitoring to ensure compliance.
The substantial bail amount was a response to concerns about Karony potentially fleeing given his significant cryptocurrency assets and previous residence in the United Kingdom. Magistrate Judge Taryn Merkl emphasized the seriousness of these conditions, highlighting the gravity of the allegations.
The involvement of Karony’s parents in securing his bail, despite past legal disputes and significant family tension, underscores the complex personal dynamics at play. Notably, Karony’s mother had previously reported him to the Federal Bureau of Investigation, indicating the extent of the family’s legal entanglements and their impact on the case.
Furthermore, as part of the bail conditions, Karony is prohibited from engaging in any cryptocurrency promotional activities. This measure aims to mitigate any potential risks associated with his involvement in the cryptocurrency sector while the legal proceedings are ongoing.
Initially, federal prosecutors opposed the bail conditions, arguing that Karony’s past legal issues with his parents and his strong ties outside the United States posed a tangible risk of him fleeing the jurisdiction. However, the court ultimately deemed the revised bail conditions sufficient to address these concerns.
In addition to the criminal charges, the Securities and Exchange Commission (SEC) has also accused Karony, Smith, and the project’s creator, Kyle Nagy (who is currently at large), of conducting a fraudulent scheme. This scheme allegedly involved making promises to investors that were not fulfilled, resulting in the misuse of over $200 million in project funds.
