The defense of former Safemoon CEO John Karony hoped to summarise the case on Tuesday, May 20th, raising questions about the prosecutor’s persuasive evidence.
Karony is charged with conspiracy to commit wire fraud, securities fraud and money laundering in connection with Safemoon. This is a crypto token that saw a wild surge in popularity and market value in early 2021, when fraud was intensifying.
Prosecutors convincingly demonstrated that Kalanie misrepresented Safemoon’s mechanism, including “locked” liquidity pools that included Bitmart who traded the tokens and revenue streams from exchanges.
Caranie’s lead (and only) lawyer, Nicholas Smith, turned his attention to what he allegedly claimed was ambiguity and contradiction in the government’s claims.
These included the fact that Karony joined the Safemoon organization after some of the deceptive messages in question were created. Most notably, Safemoon Whitepaper was written by Safemoon developer Kyle Nagy before Karony was hired as CEO, but the government showed that Misrepresentations held for nearly 10 months since Kalanie joined.
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Smith also reviewed the evidence that Caranie had not understood the code well at many points in his statement, declaring that “fraud is not just about intention, but about the level of knowledge.”
Some of Smith’s arguments were broader. In particular, he characterized Safemoon’s post showing the “lock” of a large tranche of tokens. It discloses that there was a liquidity pool do not have It’s completely lockeda theme that Smith repeated throughout the trial.
Prosecutor’s witnesses and evidence showed that these posts were intended to divert Safemoon holders from negative news. Smith claimed that prospective investors were able to ensure that the pool was not completely locked, including a hash link to block transaction hash links.
Similarly, Smith played a clip from the Safemoon Team AMA containing a reference to the discussion of pool locking, describing this as “acknowledging a liquidity pool is not locked.”
Smith further argued that evidence of disagreement about the proper treatment of Safemoon executives, particularly liquidity pools, meant there was no “conspiracy” between them.
“The conspiracy needs to be agreed,” Smith argued, but these disagreements seem to have been mostly short speed bumps on the self-rich path. At the same time, Smith claimed there was no conspiracy between Kalanie and CTO Thomas “Daddy” Smith, Safemoon. I had been ordered by Kalanie..
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The lawyers also argued that many of Kalanie’s statements, which were characterized as fraud by prosecutors, did not rise to that standard. Specifically, Smith claimed that Safemoon is “safe” and that it was not a scam because it didn’t contain any specific “factual content.”
This is similar to the “puff” defenses announced in other fraud cases. If you are trying to sell something, exaggeration or colorful languages can be accepted without crossing the line of fraud.
These arguments may have helped species of defensive plants that are doubtful in the minds of the ju umpire. Tomorrow, Wednesday, May 21st, will know that the judges have begun deliberations in the morning.
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