SafeMoon recently officially filed for Chapter 7 bankruptcy after several months of ineffective and challenging operations.
JUST IN: SafeMoon officially files for Chapter 7 Bankruptcy.— Watcher.Guru (@WatcherGuru) December 14, 2023
SafeMoon filed the voluntary petition for bankruptcy to the United States Bankruptcy Court in the District of Utah on Thursday. Chief restructuring officer Kenneth Ehrler signed the document, revealing that the firm has estimated assets between $10 million and $50 million, with estimated liabilities ranging from $100,001 to $500,000. Following this news, the SFM price also plummeted by 50%. However, there has been no official announcement from the project yet.
SafeMoon is a DeFi protocol that allows investors to profit through distribution, LP repurchasing, and token burning. In the past, the project has faced accusations of manipulating prices and dumping tokens to profit from investor funds.
On November 2nd, the U.S. Securities and Exchange Commission (SEC) and the Federal Bureau of Investigation (FBI) filed criminal charges against the SafeMoon team and issued arrest warrants for the founders. Authorities accuse Kyle Nagy, Braden John Karony (CEO), and Thomas Smith (CTO) of securities fraud, money laundering, and fraudulent transfer of funds. The SEC also determined that SFM tokens are unregistered securities, and selling these tokens to investors is considered a legal violation. Furthermore, the SafeMoon team deceived investors about the inaccessibility of locked SFM tokens, while in reality, the opposite was true. As the market capitalization of this currency reached $8 billion, the defendants fraudulently diverted and misappropriated over $200 million in purportedly locked SFM liquidity for personal gain.
Currently, Karony and Smith have been arrested, while Nagy remains at large and has not been condemned by the law. Since the incident, SafeMoon has faced numerous challenges in maintaining its platform, ultimately leading to the project’s bankruptcy today. Earlier this year, the project also suffered an attack, resulting in approximately $8.9 million in damages.