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US prosecutors to pursue ex-SafeMoon CEO case despite DOJ memo

Federal prosecutors said they will continue pursuing their case against Braden John Karony, the former CEO of crypto firm SafeMoon, despite the US Justice Department issuing a memo suggesting a policy of abandoning “regulation by prosecution” related to digital assets.

In an April 18 filing in the US District Court for the Eastern District of New York, US Attorney for EDNY John Durham said his office had reviewed the April 7 DOJ memo issued by Deputy Attorney General Todd Blanche and intended to proceed with a trial against Karony.

The former SafeMoon CEO faces securities fraud conspiracy, wire fraud conspiracy, and money laundering conspiracy charges for allegedly “divert[ing] and misappropriat[ing] millions of dollars’ worth” of the platform’s SFM token between 2021 and 2022.

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April 18 notice that US prosecutors will continue to prosecute John Karony. Source: PACER

Karony, initially indicted in October 2023 under former US Attorney for EDNY Breon Peace, argued in February that his criminal trial should be delayed, hinting that securities laws enforcement under the Donald Trump presidency could see “significant changes.” The judge denied the motion and later ordered jury selection for the trial to begin on May 5. 

However, Karony’s legal team made its claims about securities laws under Trump potentially undergoing “policy changes” before the Securities and Exchange Commission (SEC) dismissed cases and dropped investigations into many crypto firms facing allegations of violating securities laws. Blanche’s April 7 memo also suggested that the DOJ under Trump would direct jurisdictions not to pursue many crypto enforcement cases.

Related: Democrats slam DOJ’s ‘grave mistake’ in disbanding crypto crime unit

“[T]he parties may learn within days or hours of the commencement of trial that DOJ no longer considers digital assets like SafeMoon to be ‘securities’ under the securities laws,” said Karony’s legal team on Feb. 5. “Worse, the parties may learn this during or shortly after a trial, half of whose charges rest on the government’s claim that SafeMoon is such a security.”

Crypto enforcement by the SEC and DOJ under Trump

Since being appointed acting SEC chair by Trump in January, Mark Uyeda has led the agency to drop cases against Ripple Labs, Coinbase, Kraken, and others. The SEC has also launched a crypto task force headed by Commissioner Hester Peirce to explore a regulatory framework for digital assets, and issued a memo saying memecoins were not securities.

The agency’s actions suggest a more permissive approach to digital assets than that under former chair Gary Gensler.

“By directing the SEC to abdicate its critical mission of investor protection, Mr. Trump is unnecessarily endangering our financial system,” said former SEC official John Reed Stark in an April 18 New York Times op-ed with Duke University lecturing fellow Lee Reiners. “Whether he is doing so to keep his promise to crypto-donors or in a zeal to cash in (or perhaps even both), that is a troubling development not just for investors and banks, but for all of us.”

Whether Trump’s appointees in the Justice Department intend to step in and move to halt Karony’s case, as the DOJ did in the corruption case with New York City Mayor Eric Adams, is unclear. At the time of publication, the former SafeMoon CEO was set to go to trial in May and has been free on a $3 million bond since February 2024. He has pleaded not guilty to all charges.

Magazine: SEC’s U-turn on crypto leaves key questions unanswered

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Texas Representative Gill under fire over late $500K Bitcoin disclosures

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Texas Representative Gill under fire over late 0K Bitcoin disclosures

Texas Representative Gill under fire over late 0K Bitcoin disclosures

Texas Representative Brandon Gill faces scrutiny after filing late disclosures for $500,000 in Bitcoin trades, as questions over timing and STOCK Act violations arise.

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Blockchain Group adds $68M in Bitcoin to corporate treasury

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Blockchain Group adds M in Bitcoin to corporate treasury

Blockchain Group adds M in Bitcoin to corporate treasury

Paris-based Blockchain Group acquired $68 million in Bitcoin, bringing its total holdings to 1,471 BTC amid rising institutional interest in crypto treasury strategies.

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AI, robots, lasers and gap years in armed forces: Key details as UK to become ‘battle ready’

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AI, robots, lasers and gap years in armed forces: Key details as UK to become 'battle ready'

The UK must rebuild its military and get the whole country ready for war as the threat of conflict with a nuclear power like Russia or China is real, a major defence review warns.

It described what might happen should a hostile state start a fight, saying this could include missile strikes against military sites and power stations across the UK, sabotage of railway lines and other critical infrastructure and attacks on the armed forces.

Politics latest: Britain must be ‘battle-ready’, says PM

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PM challenged on NATO, defence and Gaza

In a devastating verdict on the state of Britain’s defences, the Strategic Defence Review (SDR) said today’s armed forces are “not currently optimised for warfare”, with inadequate stockpiles of weapons, poor recruitment and crumbling morale.

“The international chessboard has been tipped over,” a team of three experts that led the review wrote in a foreword to their 140-page document.

“In a world where the impossible today is becoming the inevitable tomorrow, there can be no complacency about defending our country.”

British soldiers from the 16 Air Assault Brigade training in North Macedonia. Pic: AP
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British soldiers from the 16 Air Assault Brigade training in North Macedonia. Pic: AP

Sir Keir Starmer, who commissioned the review, described a “new era” of threat that required a “new era for defence and security”.

“Every part of society, every citizen of this country, has a role to play because we have to recognise that things have changed,” the prime minister said.

The review made a list of more than 60 recommendations to enable the UK to “pivot to a new way of war”.

They include:

  • Increasing the size of the army by 3,000 soldiers to 76,000 troops in the next parliament. The review also aims to boost the “lethality” of the Army ten-fold, using drones and other technology.
  • A 20% expansion in volunteer reserve forces but only when funding permits and likely not until the 2030s.
  • Reviving a force of tens of thousands of veterans to fight in a crisis. The government used to run annual training for the so-called Strategic Reserve in the Cold War but that no longer happens.
  • Embracing new technologies such as artificial intelligence, robots and lasers. The paper said the UK must develop ways to defend against emerging threats such as biological weapons, warning of “pathogens and other weapons of mass destruction”.
  • The possibility of the UK buying warplanes that could carry American nuclear bombs to bolster the NATO alliance’s nuclear capabilities. The review said: “Defence should commence discussions with the United States and NATO on the potential benefits and feasibility of enhanced UK participation in NATO’s nuclear mission.”
  • The expansion of a cadet force of children by 30% and offering a “gap year” to people interested in sampling military life.
  • New investment in long-range weapons, submarines, munitions factories and cyber warfare capabilities.

General Sir Richard Barrons, part of the review team and a former senior military officer, described the vision as “the most profound change” to UK defences in 150 years.

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Strategic Defence Review: What does it mean?

But there were some notable gaps – likely caused by limited finances.

This includes only a brief mention of bolstering the UK’s ability to defend against cruise and ballistic missiles – a key weakness but one that would be very expensive to fix.

Earlier, Sir Keir said the review was a “blueprint to make Britain safer and stronger, a battle-ready armour-clad nation, with the strongest alliances and the most advanced capabilities, equipped for the decades to come”.

Defence Secretary John Healey, writing in a foreword to the document, said “up to” £1bn would be invested in “homeland air and missile defence” as well as the creation of a new cyber and electromagnetic warfare command.

The review was drawn up with the expectation that defence spending would rise to 2.5% of GDP this parliament – up from around 2.3% now – and then to 3% by 2034. The government has pledged to hit 2.5% by 2027 but is yet to make 3% a cast iron commitment.

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The reviewers said their recommendations could be delivered in 10 years if that spending target is reached but they gave a strong signal that they would like this to happen much sooner.

“As we live in such turbulent times it may be necessary to go faster,” the team said.

“The plan we have put forward can be accelerated for either greater assurance or for mobilisation of defence in a crisis.”

The review described the threat posed by Russia as “immediate and pressing”.

It said China, by contrast, is a “sophisticated and persistent challenge”.

It pointed to Beijing’s growing missile capability that can reach the UK and said the Chinese military’s nuclear arsenal is expected to double to 1,000 nuclear warheads by 2030.

The other two reviewers were Lord George Robertson, a former Labour defence secretary, and Fiona Hill, a Russia expert and former foreign policy adviser to Donald Trump.

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The review team warned the post Cold War-era of relative peace has ended and a time of contest, tension and conflict has returned.

Adding to the pressure, the US – by far the most powerful member of the NATO alliance – is focusing more on the threat it sees from China.

“Changes in the strategic context mean that NATO allies may be drawn into war with – or be subject to coercion by – another nuclear armed state,” the review said.

“With the US clear that the security of Europe is no longer its primary international focus, the UK and European allies must step up their efforts”.

The review set out how defence is not only the responsibility of the armed forces because countries – not just the professional military – fight wars.

It said: “Everyone has a role to play and a national conversation on how we do it is required… As the old saying goes, ‘If you want peace, prepare for war’.”

Sky News and Tortoise will launch a new podcast series – The Wargame – on 10 June that simulates a Russian attack on the UK to test Britain’s defences, with former ministers and military chiefs playing the part of the British government.

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