John Karony, CEO of failed cryptocurrency project SafeMoon, is out on bail. However, his legal team is no longer willing to represent him.
In November 2023, Thomas Smith, SafeMoon’s technical director, and Karony were arrested on charges of securities fraud, money laundering and conspiracy to commit wire fraud. However, Kyle Nagy, the project’s creator, remains at large.
Karona’s lawyers, Petrillo Klein & Boxer, wanted to drop their representation of Karona on February 12 due to lack of funds. In addition, they mentioned the appointment of public defender Nicholas Smith and Karony’s ongoing correspondence with him.
Adam Schulman, a partner at Petrillo Klein, wrote: “Mr. Smith participated in a bail hearing before Judge Merkl on February 9, 2024, when the firm represented Mr. Karony and the court released him based on a broad set of pre-trial conditions.” .
In it, he mentioned that SafeMoon had initially agreed to pay all the court fees that the firm was to pay. However, it declared bankruptcy because it failed to pay its creditors.
Karony partially paid for the law firm’s legal services, but they were exhausted, according to the application. In addition, the lawyers claimed that the government was supposed to cover expenses from the sale of Karony’s home in Utah.
on February 9, Karony was granted bail in the amount of $3 million. He was allowed to live with his parents in Utah. However, this required certain conditions, such as cyber monitoring and a ban on participating in cryptocurrency promotions.
Previously, federal prosecutors had opposed his release on bail, claiming he was a danger to the community.
In November, the SEC accused SafeMoon and its executives of arranging fake offerings of cryptocurrency that had not been registered. They promised to raise the price of the token, saying it was “safe to the moon.” Instead, they caused significant losses in the market, leading to the misuse of more than $200 million in project funds for personal purposes.
CTO Smith remains in jail. on February 9, his legal team asked him for permission to travel to Henderson and Los Angeles to attend work-related events in February and March.
The project faces one new obstacle. On Monday, an unidentified person defrauded liquidity worth more than $11 million from various pools affiliated with SafeMoon. Immediately following this transaction, speculation began about a possible link to SafeMoon‘s bankruptcy.