SafeMoon CEO Seeks Dismissal of Charges Amid DOJ Directive Shift
In an April 9 letter to New York federal court judge Eric Komitee, Karonys attorney, Nicholas Smith, argued that the DOJs April 7 memo, which disbanded its crypto unit, should play a role in the courts decision to dismiss the case. The memo, issued by U.S. Deputy Attorney General Todd Blanche, outlined the DOJs new stance on crypto-related cases.
Key DOJ Memo Shifts Approach on Crypto Enforcement
The memo from Blanche confirmed that the DOJ would no longer pursue enforcement actions or litigation that attempt to impose regulatory frameworks on digital assets. In a significant shift, the DOJ also made it clear that it would not charge violations of securities and commodities laws when wire fraud charges are more applicable and do not require determining whether a digital asset is a security or commodity.
Blanche emphasized, The Department of Justice is not a digital assets regulator, further noting that the agency would steer clear of any charges that would involve determining the classification of a digital asset.
Exemption in DOJs New Directive
Karonys legal counsel pointed out that while there is an exemption in the DOJs new policy for cases where parties wish to defend that a crypto asset is a security, Karony does not have such an interest in this case. Therefore, the attorney believes this directive should play a critical role in the dismissal of the charges against SafeMoon.
Background on SafeMoon Case
In November 2023, the DOJ and the Securities and Exchange Commission (SEC) filed charges against Karony, SafeMoon creator Kyle Nagy, and Chief Technology Officer Thomas Smith. The charges included securities violations, wire fraud, and money laundering, alleging that the SafeMoon executives misappropriated $200 million worth of assets from the project and misused investor funds.
Karonys Efforts to Clear SafeMoons Name
Karonys defense is centered on the recent shifts in DOJ policy and the growing perception that the legal framework around digital assets is still developing. His legal team hopes that the new directive will be a key factor in securing a dismissal, positioning SafeMoon as a firm in compliance with evolving regulatory standards.
This case marks a key moment in the ongoing legal landscape for cryptocurrency firms and their regulatory challenges.
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