SafeMoon Files for Bankruptcy After Founder and Executives Are Indicted on Fraud Charges
SafeMoon, a blockchain firm, has made the decision to file for Chapter 7 bankruptcy after its founder, Kyle Nagy, and two executives, Thomas Smith and Braden Karony, were charged with fraud in November. The company voluntarily filed for bankruptcy over a month after the accusations of violating securities laws were made against them.
Karony and Smith were arrested for defrauding investors by falsely claiming that funds in SafeMoon’s liquidity pools could not be withdrawn by anyone except themselves. However, it was later discovered that all three individuals had the ability to withdraw funds from these pools. The Department of Justice (DOJ) alleges that the trio used $200 million of their clients’ funds to enrich themselves and purchase expensive items.
The DOJ has charged them with conspiracy to commit wire fraud, conspiracy to commit money laundering, and conspiracy to commit securities fraud. Additionally, the U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against them, accusing them of orchestrating a massive crypto fraud scheme through unregistered sales of their native digital asset, SFM.
Impact on SafeMoon’s Price
The news of SafeMoon’s bankruptcy filing has had an impact on the price of SFM. As of now, SFM is trading at $0.000042, which reflects a 34.28% decrease in the last 24 hours.
Hot Take: SafeMoon Faces Bankruptcy Amidst Fraud Allegations
SafeMoon’s decision to file for bankruptcy comes in the wake of serious fraud allegations against its founder and executives. The accusations involve misappropriation of funds and false claims made to investors. The legal actions taken by the DOJ and SEC highlight the severity of the alleged misconduct. As a result, the price of SafeMoon’s native digital asset has experienced a significant decline. This case serves as a reminder of the importance of transparency and accountability in the cryptocurrency industry.
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