USA v. Karony et al

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
------------------------------------x
UNITED STATES OF AMERICA,
-against-
BRADEN J. KARONY,
Defendant.
------------------------------------x
MEMORANDUM & ORDER
23-CR-433
ERIC KOMITEE, United States District Judge:
Defendant Braden Karony was convicted, following a
jury trial, of having participated in three criminal
conspiracies. 	Jury Verdict, ECF No. 198. 	He moves for a
judgment of acquittal under Federal Rule of Criminal Procedure
29. 	For the reasons set forth below, the motion is denied.
Background
Karony was indicted on charges of conspiracy to commit
securities fraud (Count One), conspiracy to commit wire fraud
(Count Two), and conspiracy to commit money laundering (Count
Three). 	The following facts are taken from the evidence adduced
at trial, with all inferences drawn in the government’s favor.
United States v. Walker, 191 F.3d 326, 333 (2d Cir. 1999). 	We
set out only the facts necessary to decide the motion.
Karony was CEO of SafeMoon LLC, a company that
created a new cryptocurrency (the SafeMoon token, or “SFM”).
Trial Tr. 203:15-17, 208:1-3 (testimony of Thomas Smith, former
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SafeMoon CTO). 	Kyle Nagy, a co-conspirator, developed the
initial technology for the SFM token, and launched it in early
March 2021. 	Tr. 208:9-16 (Smith). 	In the middle of March,
Karony joined as CEO, and Thomas Smith, another co-conspirator,
became the chief technology officer. 	Tr. 203:15-22, 224:7-13,
318:9-23, 362:7-11 (Smith).
At trial, Smith testified that SFM’s main selling
points were outlined in a “white paper” — a marketing document
SafeMoon published on its website in March 2021, just days
before Karony’s arrival. 	GX-8000 (website homepage); GX-8002,
at 6-7 (white paper); Tr. 322-23, 336:7-16 (Smith). 	The white
paper presented SFM as designed to prevent an initial “valuation
bubble” and appreciate gradually as more investors purchased it.
GX-8002, at 2, 3; Tr. 972:7-19 (SafeMoon investor Bukowski); id.
at 49:19-50:5 (investor Maurer).1 	It set out two key features,
among others, to distinguish the SafeMoon token from other
crypto assets.
The first was the “SafeMoon protocol” — essentially,
the features affecting the token’s issuance and trading. 	Some
witnesses referred to these features as SFM’s “tokenomics.” 	GX-
8002, at 2, 6; Tr. 47:2-9 (Maurer); id. at 878:16-21 (investor
1 The company was named “SafeMoon” because it intended to offer
a “safe” way to the “moon,” a metaphor for a gradual increase to a high SFM
value. 	See Tr. 319-20, 437 (Smith); GX-1041-3, at 2 (Karony explaining, in a
chat on the messaging service Discord, that his username was
CPT_HODL_T_MUN#8088 to encourage users to retain their token holdings).
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George). 	Prominent among these was that each SFM transaction
was subject to a 10% tax. 	GX-8002, at 6. 	Half of this tax, the
“reflections” portion, would be redistributed to SFM holders,
increasing their holdings. 	Id.; Tr. 307:4-9 (Smith). 	The other
half would be placed into a liquidity pool (the “LP”) — a
reserve of tokens established to ensure that investors had
access to liquidity when they wished to exit their SafeMoon
positions. 	GX-8002, at 6-7; Tr. 307:16-08:9 (Smith). 	The white
paper referred to the “automatic” addition of liquidity to the
LP as the token’s “secret sauce.” 	GX-8002, at 5. 	Smith
testified that this was intended to suggest that the LP portion
of the tax would be deposited into the LP without manual
intervention. 	Tr. 674:16-18 (Smith); see id. at 48:11-21
(Maurer); id. at 880:23-81:7 (George).
Second, the white paper laid out a four-step plan to
ensure that SFM retained its value. 	GX-8002, at 7 (outlining
“Step by Step Plan to Ensure 100% Safety”). 	Both the SafeMoon
developers and investors placed particular emphasis on steps
three and four.2 	See GX-8002, at 7; Tr. 339:8-40:24 (Smith); id.
at 276, 281 (investor Olshansky). 	Step three spoke of a lock on
2 Step one provided, “Dev Burned All Tokens in Dev Wallet Prior to
Launch.” 	Step two provided, “Fair Launch on DxSale.” 	As Smith explained, a
“dev burn” occurs when the developer makes unusable a certain number of
tokens, thereby creating a limited universe of tradeable tokens. 	Tr. 337
(Smith); Tr. 293:13-16 (Olshansky). 	A fair launch sale is where potential
investors all have the same initial opportunity to buy the asset. 	Tr.
338:15-22 (Smith).
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the liquidity pool: it provided, “LP Locked on DxLocker for 4
years,” referring to a third-party application that provided for
liquidity-pool custody. 	Tr. 339, 395:17-21 (Smith). 	Similarly,
step four provided, “LP Generated With Every Trade and Locked on
Pancake [a trading venue, discussed below].” 	See GX-8002, at 7
(emphasis added). 	Smith testified that “locked” meant that the
SafeMoon developers could not withdraw from it. 	Tr. 328:21-
29:1-9, 339:8-18 (Smith); see Tr. 50:23-25 (Maurer).
SafeMoon was listed for trading in two primary venues.
Tr. 240:18-22, 463, 755 (Smith). 	One was “PancakeSwap.”
Tr. 240:18-22. 	SafeMoon hosted the LP on PancakeSwap. 	Tr.
309:5-10 (Smith). 	Special Agent Jeffrey Petrower, the
government’s asset-tracing witness, explained that a “smart
contract,” or unique software code, dictated the liquidity
pool’s functioning. 	Tr. 1799:17-1800:8. 	The smart contract
implemented a feature called “swap and liquify,” which converted
the LP portion of the tax into a pair of coins — a SafeMoon coin
and a Binance (“BNB”) coin, another digital token. 	GX-6000
(chart outlining tokenomics); Tr. 1794:11-14, 1832 (Petrower).
When this pair was added to the LP, an “LP token,” or a receipt
for the deposit, was sent to a secure address associated with
the smart contract’s owner, which functioned as a digital
wallet. 	GX-6000; GX-6002 (listing wallet addresses that served
as the SFM contract owner); Tr: 229-30 (Smith); id. at 1794:11-
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14 (Petrower). 	LP token pairs could only be withdrawn through
the use of LP tokens. 	Tr. 1796:15-18 (Petrower).
As both Smith and SafeMoon investors testified,
maintaining a robust balance of these token pairs in the
liquidity pool provided some assurance that SFM holders would be
able to sell SFM tokens when they wished and receive BNB in
exchange. 	Tr. 239:9-14 (Smith); id. at 276:6-15 (Olshansky);
1252:14-20 (investor Sutton). 	When SFM trading increased, the
token tax and locked LP would preserve an adequate supply of
liquidity. 	Tr. 243:7-45:7 (Smith). 	Professor John Griffin, the
government’s cryptocurrency expert, testified that a locked LP
also provided assurances against a “rug pull,” which is
essentially theft: Griffin testified that a rug pull occurs when
investors “put money in the pool” and “the founders of a project
that control or wrote the [smart] contract” “basically take all
the funds” and “pull the rug on everybody else.” 	Tr. 139:13-24;
see id. at 884:13-20 (George).
In addition to PancakeSwap, SFM traded on a second
exchange called BitMart. 	Tr. 41:16-18 (Maurer). 	When SFM began
trading on BitMart, SafeMoon announced that BitMart would
replicate SFM’s tokenomics. 	GX-3003-A (Karony announcement to
SafeMoon investors that BitMart would use SafeMoon tokenomics);
GX-8017 (BitMart press release announcing SFM). 	Because BitMart
lacked the functionality to host a liquidity pool, however,
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SafeMoon designed a mechanism to manually implement SFM
tokenomics for such trading. 	Tr. 459:10-15 (Smith); GX-6001
(chart outlining tokenomics on BitMart). 	SafeMoon developers
received the LP portion of the tax associated with BitMart
trades each month, and then manually deposited the commensurate
token pairs into the LP on PancakeSwap. 	Tr. 459:10-15 (Smith).
The SafeMoon team publicized SFM on several online
platforms. 	In particular, the developers discussed SFM in a
series of live-stream YouTube videos known as “Ask Me
Anythings,” or “AMAs.” 	E.g., GXs-3000-3006; Tr. 401:2-11,
449:13-50:1 (Smith). 	SafeMoon hosted the AMAs to expand
SafeMoon’s reach and discuss its tokenomics with current and
potential investors. 	Tr. 401:2-11, 449:13-50:1 (Smith); id. at
885 (George). 	In an April 1, 2021 AMA, Smith reiterated that
half of the SFM tax “goes to PancakeSwap and it’s locked.”
GX-3003-A; see also GX-3002-A (March 25, 2021 AMA). 	In another
AMA (about one week later), Karony explained that for trades on
BitMart, the tax would be “added back to the liquidity pool.”
GX-3004-B. 	Several investors testified that after watching the
AMAs, they felt assured that no “rug pull” would occur because
the LP was locked. 	E.g., Tr. 1340 (investor Uhric); Tr. 885
(George).
The government’s evidence contradicted these (and
other) statements about SFM. 	Smith testified that from SFM’s
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creation, Nagy — and upon joining, Smith and Karony — could
access the LP at will. 	Tr. 340:3-14, 565:19-24, 657:16-24
(Smith). 	Because they retained unrestricted access to the
SafeMoon contract owner wallets designated to receive the LP
tokens, Tr. 501:23-02:8, 504:9-10, 512:23-25 (Smith); id. at
1796-99, 1831:15-24 (Petrower), the LP was not “locked” in any
physical sense. 	On the contrary, the developers could withdraw
assets from it as they saw fit. 	Tr. 436-37, 662:10-16 (Smith).
And they did so frequently. 	Between April 2021 and
September 2021 — the same period when the white paper stated
that the LP was locked — Smith made eighteen withdrawals from
the LP. 	Tr. 1810:10-18, 1832:23-33:4-15 (Petrower); GX-6006, at
11 (government asset tracing exhibit). 	Each time, he did so at
Karony’s request. 	Tr. 485, 504-05 (Smith). 	Many of these
withdrawals were for sums exceeding $1 million, including one
for $6.3 million on July 8. 	GX-6006, at 11. 	Further, the
government showed that when BitMart sent SafeMoon the 10% tax
payments, Karony diverted at least some of these assets for
personal benefit rather than depositing them into the LP.
Tr. 2016 (Petrower); Tr. 475:3-6, 482-83 (Smith).
The developers did communicate that they might use the
LP for certain limited purposes associated with managing the
endeavor. 	On April 20, 2021, a Twitter user known as
“#WARONRUGS” (“War on Rugs”) — an account that sought to reveal
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crypto fraud — accused the SafeMoon developers of accessing the
LP. 	GX-7002-A, at 2; Tr. 546:13-22 (Smith). 	Karony tweeted in
response that this was “fake news,” GX-7001-L-1, but went on to
state that “situations arise which may require” use of the LP
for business purposes including SafeMoon’s “development costs” —
but only as a “last resort.” 	Tr. 352 (Smith); GX. 7001-L-5, -L-
6 (Karony tweets).
Contrary to those assurances, Karony and his co-
conspirators moved assets from the LP through a series of
personal crypto wallets to private bank accounts and spent the
proceeds on luxury automobiles and real estate, among other
things. 	Tr. 505:9-13 (Smith); GX-6006, at 50-53. 	SafeMoon made
periodic announcements that it was locking the LP. 	See GX-3002-
A (March 25, 2021 AMA announcing that the LP was locked); Tr.
329, 646:15-20 (Smith); id. at 2372 (Professor Mizrach). 	Often,
however, Karony and his co-conspirators unlocked the LP and
withdrew from it for personal benefit within just days after
such announcements — without informing investors they were doing
so. 	E.g., GX-1042-9 (Karony’s April 1 request to Smith to
withdraw from the LP); GX-1042-12 (April 8 request); Tr. 534-35
(Smith).
* 	* 	*
At the close of the government’s evidence, Karony
moved orally for a judgment of acquittal. 	Tr. 2462:16-18; Fed.
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R. Crim. P. 29(a). 	He did not provide a specific basis for his
motion, and the Court reserved judgment. 	See Tr. 2462:19-20.
After the jury convicted Karony on all counts, he
renewed his motion for acquittal in a three-sentence letter.
Like the oral motion, this letter provided no basis beyond the
general statement that “the government presented insufficient
evidence to convict.” 	Renewed Rule 29 Mot. 1, ECF No. 204; Fed.
R. Crim. P. 29(c). 	The Court set a briefing schedule, inviting
Karony to file a brief in support of the motion. 	See Docket
Order dated June 4, 2025. 	Karony did not file that brief.
Nevertheless, the government responded comprehensively.
Government Opp’n to Rule 29 Mot., ECF No. 214. 	Karony then
filed a reply. 	See Karony Reply in Supp. of Rule 29 Mot., ECF
No. 218. 	He challenges the sufficiency of the evidence
generally, and makes a series of specific arguments, as
discussed below.3
Discussion
Rule 29 motions face a high bar: a defendant can
prevail “only if the evidence that the defendant committed the
3 Although Karony timely made his Rule 29 motion, see United States v.
Allen, 127 F.3d 260, 264 (2d Cir. 1997), he did not offer arguments in
support. 	His election put the government at a disadvantage in preparing its
opposition, and meant that Karony raised all his Rule 29 arguments in reply.
An argument raised for the first time in a reply brief is typically waived.
United States v. George, 779 F.3d 113, 119 (2d Cir. 2015) (raising for the
first time an argument in a reply is “reason enough to reject” it); see also
United States v. Hatfield, 795 F. Supp. 2d 219, 242 (E.D.N.Y. 2011) (refusing
to reach merits of argument raised for the first time in reply brief).
Several of his arguments are rejected on this basis, and on the merits.
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crime alleged is nonexistent or so meager that no reasonable
jury could find guilt beyond a reasonable doubt.” 	United States
v. Guadagna, 183 F.3d 122, 130 (2d Cir. 1999).4 	We review the
sufficiency of the evidence “in the light most favorable to the
government, and all permissible inferences must be drawn in the
government’s favor.” 	United States v. Landesman, 17 F.4th 298,
319 (2d Cir. 2021).
For conspiracy convictions — like those on all counts
here — “the deference accorded a jury’s verdict is especially
important because a conspiracy by its very nature is a secretive
operation, and it is a rare case where all aspects of a
conspiracy can be laid bare in court with the precision of a
surgeon’s scalpel.” 	United States v. Hild, 147 F.4th 103, 110-
11 (2d Cir. 2025).
Karony’s motion for a judgment of acquittal is denied,
largely for the reasons explained in the government’s briefs.
See ECF Nos. 214, 230. 	The evidence presented was not so
“nonexistent or . . . meager that no reasonable jury” could have
found the defendant guilty. 	Guadagna, 183 F.3d at 130. 	To the
contrary, it was overwhelming. 	We take up four of Karony’s
specific arguments below.
4 Unless otherwise noted, when quoting judicial decisions this order
accepts all alterations and omits all citations, footnotes, and internal
quotation marks.
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A. 	Sufficiency of Evidence as to Counts I (Securities Fraud
Conspiracy) and II (Wire Fraud Conspiracy)
False Statements. 	Karony argues that the evidence
failed to establish any misrepresentations to SFM purchasers.
Reply 1-5. 	He also argues that because SafeMoon announced in
their AMAs that the developers were going to lock the LP, they
implicitly disclosed that the LP was not locked prior to those
announcements. 	Reply 4-5. 	But the evidence was easily
sufficient for a reasonable jury to conclude that Karony and his
co-conspirators made materially false statements.
First, Karony argues that the evidence was
insufficient to show that the statements from the SafeMoon
website and white paper concerning the LP were false. 	Reply 1-
3. 	The website stated, among other things, that “[e]very trade
contributes toward automatically generating liquidity toward
Pancake Swap — locked forever.” 	GX-8000, at 1; Reply 1-2. 	And
the white paper contained the statement that “LP Generated With
Every Trade & Locked on Pancake.” 	GX-8002, at 7; see also GX-
8004, at 3; GX-8009, at 3 (later versions of the white paper).
Karony argues that the website’s statement about
automatic locking was qualified by his and his colleagues’
statements during the AMAs, in which they spoke of locking the
LP on several occasions in March and April 2021. 	These
comments, he contends, at least implied that the LP was not
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“automatically” locked. 	As to the white paper, he argues that
the phrase “and Locked on Pancake” should naturally have been
understood to mean that “some unspecified amount [was] locked” —
not the entire LP. 	Reply 3. 	He goes on to argue that this
statement was literally true because some portion of the LP was
“periodically locked beginning within days of [his] arrival at
the company.” 	Id.
The evidence, however, was more than sufficient to
conclude that these statements were false. 	As Smith testified,
removing from the LP had the “opposite effect of locking”
because it could lead to a “rug pull” – precisely what a locked
LP was meant to avoid. 	Tr. 532:15-22.5 	Regardless, Karony never
disclosed that the LP would be unlocked to finance his (and his
co-conspirators’) purchases of luxury automobiles and real
estate. 	Tr. 441:22-42:9 (Smith). 	To the contrary, they took
measures to conceal their access. 	Tr. 436-37:5 (Smith). 	Smith
testified that when he posted photos of himself with luxury
cars, he “l[ied] about the source of the funds” because if
investors “knew” he and Karony were using LP funds for such
ends, they would sell their SFM. 	Tr. 442:16-43:3 (Smith). 	The
government also introduced a Discord chat where Smith and Karony
5 SafeMoon investors understood a “locked” LP to mean that the
developers could not access the LP at all. 	Tr. 1347:17-19 (Uhric); id. at
51:10-15 (Maurer); id. at 273:17-21 (Olshansky). 	This understanding was
reasonable, in light of all the evidence: a “locked” LP that could be opened
would defeat the entire purpose of locking. 	Tr. 1035:20-36:1-7 (Wyatt).
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discussed withdrawing from the LP in increments in order to
avoid driving the LP to “dangerously low” levels. 	Tr. 430; GX-
1042-8, at 2, 6. 	And in an AMA from March 19, Karony told
investors that he was “getting paid a little bit . . . just so
we can cover the bills.” 	GX-3000-A. 	This was misleading at the
very least: Agent Petrower traced approximately $9.9 million
Karony obtained from the LP for personal benefit. 	Tr. 1993:21-
94:5; see also id. at 1992-93 (tracing approximately $5 million
in withdrawals for personal benefit for Nagy and nearly $3
million for Smith).
As to the AMA disclosures, Karony points to two in
particular. 	First, during the AMA from March 25, 2021, Hank
Wyatt, a former SafeMoon employee who helped moderate the AMAs,
read a question from a viewer as to whether the LP tokens
currently being generated were locked. 	GX-3002-A. 	Smith
replied that “either during this video right now or minutes
after, we’re gonna be locking whatever extra LP that we’ve
generated over time.” 	Id.; Reply 4. 	Karony argues that this
statement was true — as his expert Professor Bruce Mizrach
testified, SafeMoon locked the LP that same day – and functioned
as a disclosure that the LP could be (and had previously been)
unlocked. 	Tr. 2377 (Mizrach).
Even if the locking announcement did disclose that the
SafeMoon developers had some prior access to the LP, the
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evidence showed that Karony and his co-conspirators only made
this announcement several weeks after they had already withdrawn
from the LP. 	As Special Agent Petrower demonstrated at trial,
the SafeMoon developers made twelve withdrawals from the LP
prior to March 25, including a $100,000 withdrawal on March 14
and a $90,000 withdrawal on March 15. 	GX-6006, at 5; Tr.
1803:2-20. 	By the time of this AMA, the ship had sailed; they
had already withdrawn LP funds. 	And the locking statements were
misleading on their own terms: after “locking” the LP, Karony
and his co-conspirators continued to access it at will, often
within days of these announcements. 	GX-1042-9 (Karony’s April
1, 2021, request to withdraw $35,000 from the LP); Tr. 646:16-20
(Smith); see GX-3006-A (AMA also announcing locking of the LP).
Karony also points to an AMA from April 21 in which he
and Smith addressed the “War on Rugs” tweet. 	See GX-3006-A.
After acknowledging investor “questions regarding the liquidity
pool,” Karony read from part of a series of tweets he posted
earlier that day. 	Id.; see GX-7001-L2 to -L7. 	Karony said that
the SafeMoon developers “may” access the LP in limited
instances, including for “development costs” or to “seed other
exchanges.”6 	GX-3006-A. 	He went on to state that SafeMoon did
not “foresee a need, you know, in the future” to do so. 	Id.
6 Seeding exchanges refers to launching SFM on other crypto exchanges,
including by creating liquidity. 	Tr. 566:22-25 (Smith).
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According to Karony, this functioned to disclose that the
SafeMoon developers could access the LP for business-related
purposes. 	Reply 5.
The evidence, however, was more than sufficient to
find that the April 21 AMA statements further misled investors
as to the purpose for which the developers accessed the LP.
Contrary to tapping the LP for SafeMoon development costs or to
seed exchanges, Karony himself used the LP to purchase, among
other things, multiple supercars, three real properties, and
other luxury goods. 	Tr. 1973:20-24, 1993:21-94:5 (Petrower);
Tr. 586 (Smith). 	He had discussed doing so, in private
exchanges with Smith, for over a month by the time that he made
the April 21 statement. 	See, e.g., GX-1042-2 (March 15 Discord
exchange where Karony and Smith discuss buying luxury
automobiles); GX-1042-8, at 4 (March 28 exchange discussing
using LP funds for “real estate”). 	And within weeks of saying
SafeMoon did not “foresee a need” to use the LP, GX-3006-A,
Karony and his co-conspirators continued to withdraw. 	GX-6006,
at 11 (seven LP withdrawals in May, many for several million
dollars each); Tr. 1832-33 (Petrower).
In a similar vein, Karony argues that in another tweet
from April 21, he accurately represented that SafeMoon would
inform investors, in advance, if they were going to use the LP.
GX-7001-L-6. 	Karony tweeted that the LP is a “last resort,” and
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before withdrawing, the SafeMoon developers would “publicly go
to the community and let you know if the LP will be used and
what for, ahead of time.” 	Id.; Reply 5. 	But evidence was more
than sufficient to find that this and similar tweets were false.
The SafeMoon developers did not “publicly go to the community”
before withdrawing from the LP, but made withdrawals following
discussions in their private Discord messages.7 	See Tr. 485,
505:2-13 (Smith); GX-1042-7 (Karony’s March 21, 2021, request to
“exit” LP funds).
Materiality. 	Next, Karony argues that the government
failed to establish the materiality of the statements concerning
the LP. 	Karony contends that the “purported misstatements” did
not go to the “heart of the bargain” because SafeMoon did not
represent that “all newly generated LP tokens would be locked
automatically upon generation.” 	Reply 8-9.
As addressed above, the conspirators did make a
representation almost identical to that one on the SafeMoon
website. 	See supra 11-12 (citing GX-8000). 	More to the point,
investors testified that the representations regarding a locked
LP were important to their decision to invest. 	See Tr. 1347:22-
7 Karony also contends that the evidence was inadequate to show he knew
that the funds were being withdrawn from the LP. 	But evidence showed that
Karony and Smith discussed using the LP funds directly. 	E.g., GX-1042-8, at
1-2 (March 23, 2021 Discord chat where Smith told Karony that “we shouldn’t
empty the lp” because it could significantly impact the value of SFM).
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48:7 (Uhric); id. at 1257:1-16 (Sutton). 	Numerous investors
explained that the assurances a locked LP provided against a
“rug pull” impacted their decision to purchase SFM. 	E.g., Tr.
275:17-76:11 (Olshansky), 1251:1-53:24 (Sutton). 	Investor
witnesses also testified that if they knew Karony and his co-
conspirators could withdraw LP assets for personal spending,
they would not have invested at all. 	E.g., Tr. 278:18-79:16
(Olshansky), 895:11-96:12 (George); 979:14-20 (Bukowski);
1037:25-38:16 (Wyatt).
Karony also argues that many investors bought SFM on
BitMart, which “undermined the materiality case” because “there
was no liquidity pool” there. 	Reply 9. 	As outlined above,
however, SafeMoon advertised that SFM tokenomics would be
replicated for BitMart volume. 	E.g., GX-3003-A, GX-3004-B.
Under the stated protocol, BitMart would send payments to the
SafeMoon developers to account for the 10% tax, half of which
SafeMoon was supposed to deposit back into the LP. 	GX-6001;
Tr. 481-83 (Smith). 	However, the SafeMoon developers did not
consistently deposit these payments the LP and used at least
some of them for personal purchases, contrary to their
representations otherwise. 	Tr. 2016:11-16, 2017:9-16
(Petrower); id. at 482-83, 517 (Smith). 	The evidence was more
than adequate for a jury to find these representations material:
multiple investor-witnesses who purchased on BitMart testified
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that the promise of SFM tokenomics there was important to their
decision to invest, including to prevent a rug pull. 	Tr. 55:13-
19, 56:1-18 (Maurer); id. at 1347:1-11 (Uhric).
Existence of an Agreement. 	Then, Karony argues that
evidence did not “show Karony’s agreement to join a scheme or
artifice to defraud with the specific intent to defraud victims
of money or property.” 	Reply 9. 	Karony contends that he and
Smith did not have an agreement to withhold information from
SafeMoon investors about the LP, and that the evidence did not
establish the terms of any agreement between Karony and his
alleged co-conspirators. 	Id.
On this point, the Court instructed the jury that it
could “infer the existence of a conspiracy from the
circumstances of this case and the conduct of the parties
involved. 	In a very real sense, . . . in the context of
conspiracy cases, actions often speak louder than words.”
Tr. 2761:2-6.
The co-conspirators’ actions easily sufficed to allow
that inference. 	Moreover, the government did not have to stand
on conduct evidence alone in this case. 	The government
introduced numerous online conversations in which Karony and his
co-conspirators discussed withdrawing from the LP and concealing
those withdrawals from investors. 	On March 15, 2021, for
example, Karony and Nagy discussed in a Discord chat whether
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they should be “honest” about accessing the LP. 	GX-1044-3. 	The
next day, Smith messaged Karony that he “just told a bunch of
people we probably wouldn’t” access the LP. 	GX-1042-2. 	Smith
testified that after this conversation, he and Karony decided to
“bury” the fact that the SafeMoon developers could access the LP
at will. 	Tr. 367:8-13. 	In another exchange, Karony expressly
directed Smith not to disclose to investors their access to the
LP. 	E.g., GX-1042-4, at 2 (March 17 exchange; Karony tells
Smith to “make you sure specify we wont touch the LP”). 	Despite
representing to the public that the SafeMoon developers were not
accessing the LP, Karony told Smith that Smith “could withdraw”
“[s]omewhere between 400 and 700,000 dollars” a month from the
LP to “keep for [him]self.” 	Tr. 362:12-63:2 (Smith).
Karony also asserts that the government did not prove
an agreement as to the sale of SFM on BitMart because “the
government adduces no BitMart ‘co-conspirator.’” 	Reply 9. 	But
evidence showed that Karony and Smith coordinated in the BitMart
scheme. 	As Smith testified, to generate an adequate supply of
SFM for trading on BitMart, Karony directed Smith to withdraw
SFM-BNB token pairs from the LP. 	Tr. 466:6-22, 467:6-12, 473,
478. 	Again at Karony’s request, Smith then sent just the SFM
part of the pair to BitMart — but he and Karony retained the BNB
tokens and used them for bonuses, among other things.
Tr. 467:6-9, 469:15-20. 	As Smith testified, they did not tell
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investors about this because “withdrawing liquidity”
contradicted their “public announcements” as to how the token
was supposed to function. 	Tr. 467:15-18. 	Among other things,
Karony stated on several AMAs — with Smith present, as usual —
that BitMart would implement SFM tokenomics, including its
primary LP features. 	See GX-3003-A (April 1 AMA); GX-3004-B
(April 4 AMA). 	Based on this and similar evidence, a reasonable
jury could find that Karony acted with Smith to misrepresent how
they would use LP in connection with the BitMart exchange.8
B. 	Sufficiency of Evidence as to a Securities Transaction
(Count I)
Next, according to Karony, the evidence failed to
establish that SFM was a security. 	Reply 8. 	On this point, the
jury needed to find: (1) “the investment of money”; (2) “in a
common enterprise”; (3) “with a reasonable expectation of
profits to be derived from the efforts of others.” 	Id. at
2767:24-68:2; see SEC v. W.J. Howey Co., 328 U.S. 293, 298-99
(1946). 	To satisfy the second element, the Court instructed
that the government needed to prove horizonal commonality, or a
“tying of each individual investor’s fortunes to the fortunes of
8 Karony also adds the argument, in one sentence, that the government’s
evidence as to the BitMart scheme was either a constructive amendment or
fatal variance. 	Reply 9. 	This argument is unavailing. 	First, Karony raises
it for the first time in his reply, which is “reason enough” to reject it.
George, 779 F.3d at 119. 	In any case, the indictment gave Karony “notice of
the core of criminality to be proven at trial,” United States v. Heimann, 705
F.2d 662, 666 (2d Cir. 1983), including as to the BitMart scheme. 	See
Indictment ¶¶ 56-59 (alleging that Karony and his co-conspirators misled
investors as to the purchase of SafeMoon on “Crypto Exchange 2”).
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[the] other investors by the pooling of assets.” 	Tr. 2768:24-
69:2. 	For the third element, the Court instructed that the jury
could consider, among other things, “whether SafeMoon used
promotional materials, or otherwise marketed [SFM] to emphasize
opportunities for potential profit.” 	Id. at 2769:11-14.
Karony argues that the SFM token came with no
“contractually-grounded expectation of future value.” 	Reply 8.
He also argues that because SFM “tokenomics was automated,”
investors could not have an expectation of profits derived from
the efforts of Karony and his co-conspirators. 	Reply 8.
The evidence was more than sufficient for the jury to
find the Howey test satisfied. 	First, SFM investors invested
money into SFM when they exchanged U.S. dollars or BNB for SFM
tokens. 	Tr. 41:1-10 (Maurer); 269:10-15 (Olshansky). 	As to a
common enterprise, each investor’s fortune was tied to others’
fortunes, see Revak v. SEC Realty Corp., 18 F.3d 81, 88 (2d Cir.
1994), because (among other things) half of the 10% tax went to
the liquidity pool, which was intended to benefit all token
holders. 	GX-8002, at 5; Tr. 244-45 (Smith).
SFM investors also had a reasonable expectation of
profits to be derived through the efforts of Karony and his co-
conspirators. 	Investors testified that they expected their SFM
holdings would increase in value because of the LP and
reflection payments, which the co-conspirators managed on an
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ongoing basis. 	See, e.g., Tr. 275:17-76:11 (Olshansky) 1251:1-
53:24 (Sutton). 	The evidence demonstrated that these
expectations were reasonable: Karony and his co-conspirators
represented that SafeMoon was a secure investment because of its
tokenomics and locked LP. 	Tr. 321:4-12 (Smith); GX-8000
(SafeMoon website); GX-8002, at 5 (referring to Automatic LP as
SafeMoon’s “secret sauce”). 	Finally, contrary to Karony’s
argument that SafeMoon advertised itself as fully “automated”
token with no managerial intervention, the evidence showed
otherwise. 	Karony and his co-conspirators presented their
management of the liquidity pool as critical to making SafeMoon
a success. 	They did so through frequent AMAs, where they
discussed the value of locking the LP, as well as tweets
explaining how SafeMoon would use the LP for “future SafeMoon
innovations.” 	E.g., GX-3003-A (April 1, 2021 AMA); GX. 7001-L-5
(Karony tweet about using LP for development costs).
C. 	Sufficiency of Evidence as to Count III (Money
Laundering Conspiracy)
Karony next contends that the evidence was
insufficient to establish any element of money laundering. 	He
focuses primarily on the contention that the government
presented no evidence of “domestic money laundering” in
violation of 18 U.S.C. § 1956(a)(1). 	Reply 10 (“No evidence
proved an agreement to commit domestic money laundering, and the
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government failed to charge predicate international
laundering.”).
On this point, the Court instructed the jury that the
government needed to prove that the financial transactions at
issue “in some way or degree” affected interstate or foreign
commerce. 	Tr. 2788:23-25. 	The Court explained, “[i]nterstate
commerce includes any transmission or transfer between persons
or entities located in different states, and foreign commerce
means the same thing, except it is between a person or entity in
the United States and a person or entity in a foreign country,
and the government satisfied its burden if it proves any effect
or involvement, regardless of whether it was beneficial or
harmful.” 	Tr. 2790:13-25.
The evidence was sufficient to demonstrate that the
transfers from the LP affected interstate commerce. 	Karony and
his co-conspirators removed assets from the LP to anonymous
crypto wallets, transferred those assets into personal bank
accounts, and used them to purchase properties and cars, among
other things, in various states. 	E.g., Tr. 1968-71, 1980
(Petrower); GX-6006, at 51-53.
D. 	Argument Challenging Venue Against All Counts
Finally, Karony levels the argument — against all
counts — that there was insufficient evidence to establish venue
in the Eastern District of New York. 	Reply 10. 	Karony argues
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that the government did not establish that a dinner between him
and a BitMart representative in New York furthered any of the
charged conspiracies, but he does not otherwise develop his
argument as to venue. 	Reply 10.
The government must prove venue by a preponderance of
the evidence. 	See United States v. Ramirez, 420 F.3d 134, 139
(2d Cir. 2005). 	Venue is proper in “a district where the
offense was committed.” 	Fed. R. Crim. P. 18. 	For a conspiracy
offense, as all three offenses are here, “venue is proper in any
district in which an overt act in furtherance of the conspiracy
was committed by any of the coconspirators.” 	United States v.
Geibel, 369 F.3d 682, 696 (2d Cir. 2004).
The evidence was sufficient for a reasonable jury to
find that numerous overt acts on each count occurred in this
District. 	SFM targeted potential investors in New York, and at
least one investor first learned of SafeMoon while living in
this District. 	Tr. 1337-38 (Uhric). 	Karony also traveled
through John F. Kennedy Airport to meet with Chad Liang, a
BitMart representative. 	GX-10016 (Karony flight records); GX-
10012-E (Karony and Liang messages). 	The government introduced
a message exchange indicating the meeting in fact occurred. 	See
GX-10012-E, at 62-63. 	This and other evidence sufficed to
establish venue was proper in this District.
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Conclusion
For the reasons outlined above, the defendant has not
shown that no reasonable jury could have found him guilty on all
three counts of conviction. 	Accordingly, the defendant’s Rule
29 motion is denied.
SO ORDERED.
/s/ Eric Komitee
ERIC KOMITEE
United States District Judge
Dated: 	February 1, 2026
Brooklyn, New York
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