The criminal trial of former SafeMoon CEO John Karony entered its second week with testimony from Henry “Hank” Wyatt, a SafeMoon staffer who handled communications until his resignation in September 2021.
Wyatt, under questioning from prosecutors, testified that Karony, SafeMoon creator Kyle Nagy, and CTO Thomas “Papa” Smith jointly approved content for SafeMoon’s website in March of that year that misrepresented the nature of its tokenomics.
Specifically, these included claims that new liquidity generated by the protocol was “automatically” locked in the liquidity pool.
Wyatt also testified that Karony directed changes to this language later. In preserved messages, Karony sought language that would clarify that “LP is auto-generated but not auto-locked” via SafeMoon’s 10% transaction fee.
Karony also had the slogan “100% community owned” changed to “100% community driven.”
While such later changes at Karony’s direction may lead the jury to conclude that he eventually did the right thing, they are likely to receive strong direction from the court that any misrepresentation on Karony’s watch meets the legal standard for securities fraud.
The prosecution has generally stuck to this sort of subdued, technical approach, eschewing theatrics or strong narrative flourishes.
Read more: John Karony trial starts with a confused witness and SafeMoon merch
In one of the trial’s rare glimpses of Karony’s personality so far, Wyatt testified that he had chosen to resign from SafeMoon because it was a “hostile work environment.”
He added, “[Karony] was not a good communicator… He was very aggressive. He would call me any hour of the night to cuss out somebody.”
The prosecution did not pursue further details on Karony’s hostility.
Under cross-examination by defense lawyer Nicholas Smith, Wyatt testified that he himself had not proactively sought to correct misrepresentations on the SafeMoon website. Wyatt has not been charged with a crime and testified under a subpoena.
Smith also elicited from Wyatt that Karony did not socialize with other core leadership, and was based in London for much of the period in question. That may serve to weaken allegations of conspiracy in jurors’ minds.
