SafeMoon, a once-thriving cryptocurrency protocol, has filed for Chapter 7 bankruptcy amidst allegations of fraud and mismanagement. The founders of SafeMoon, Kyle Nagy, Thomas Smith, and Braden Karony, are facing a $200 million SEC lawsuit for securities fraud.
The bankruptcy filing, officially submitted on December 14th, is a form of liquidation bankruptcy. SafeMoon’s Chief Restructuring Officer explained in a letter to employees that the company’s financial situation prevented it from paying wages before the filing. Employees are now required to file a claim in the bankruptcy court for their unpaid wages.
The United States Securities and Exchange Commission (SEC) has accused SafeMoon executives of intentionally misleading investors about the accessibility of SFM’s locked liquidity. Instead, they allegedly used the funds for personal gain while SafeMoon’s market capitalization reached $8 billion. The legal troubles of SafeMoon were further compounded by the arrest of founders Braden Karony and Thomas Smith.
Following these developments, the price of SafeMoon’s SFM token experienced a significant drop, falling from $0.000065 to $0.000045 within a five-hour period on December 14th. However, the price did rebound slightly to $0.000061. Currently, the token is trading at $0.000038, down by 42% and 98% from its all-time high of $0.0033.
The SafeMoon community has expressed disillusionment and frustration on social media, with some users alleging that the developers orchestrated a rug pull. Former users and community members feel scammed and have lost money. Santiago Melgarejo, a former non-fungible token analyst and sales specialist for SafeMoon, highlighted warning signs such as employees being fired without pay.
Disclaimer: This article is for informational purposes only and does not constitute legal, tax, investment, financial, or other advice.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 |
| Sentiment | very negative |
| Relevance Score | 1 |
| People | Mike Rose, Thomas Smith, Braden Karony, Kyle Nagy, Joel T. Marker |
| Companies | United States Securities and Exchange Commission, SafeMoon, Reddit, United States Bankruptcy Court, CoinGecko |
| Currencies | None |
| Securities | None |
