SafeMoon Files For Chapter 7 Bankruptcy Amidst Fraud Allegations

SafeMoon has filed for Chapter 7 chapter as a whirlwind of accusations of fraud and mismanagement surrounding the once-thriving protocol.

SafeMoon founders Kyle Nagy, Thomas Smith, and Braden Karony have been accused of wilfully deceptive traders and face a $200 million SEC lawsuit for securities fraud. 

SafeMoon Recordsdata For Chapter 

SafeMoon formally filed for Chapter 7 chapter, additionally referred to as “liquidation chapter’ on the 14th of December in a submitting to the US Chapter Courtroom within the District of Utah. The petition was filed on behalf of SafeMoon by legal professional Mike Rose, with Chief Decide Joel T. Marker assigned the case. A letter to staff purportedly written by SafeMoon’s Chief Restructuring Officer defined that the corporate’s chapter run was why it couldn’t pay worker wages earlier than its chapter submitting. 

“You will want to file a declare within the chapter court docket in your unpaid wages.”

Based on the US Securities and Trade Fee, SafeMoon executives wilfully misled traders concerning the accessibility of SFM’s “locked” liquidity. As a substitute, they utilized the funds for private features at a time when SafeMoon’s market capitalization soared to $8 billion. SafeMoon’s authorized troubles have been additional difficult by the arrest of founders Braden Karony in Provo, Utah, and Thomas Smith in Bethlehem, New Hampshire. Nevertheless, Kyle Nagy has nonetheless not been positioned below arrest. 

The USA Securities and Trade Fee had charged SafeMoon, its founder Kyle Nagy, CEO John Carony, and CTO Thomas Smith for violating securities legal guidelines in what the SEC described as a “large fraudulent scheme.” 

SFM Value Tanks 

On account of the developments, the value of SafeMoons SFM token tanked, dropping from $0.000065 to $0.000045 over a five-hour interval on the 14th of December, based on information from CoinGecko. Nevertheless, the value did rebound to $0.000061. The cryptocurrency dropped by 31% following the chapter submitting. Presently, the token is buying and selling at $0.000038, down by 42%. The token is down a staggering 98% from its all-time excessive of $0.0033, which it reached on the fifth of January, 2022. 

Group Disillusioned 

Former SafeMoon customers and group members expressed their frustration on social media following the developments and the corporate submitting for chapter, alleging that SafeMoon builders orchestrated a rug pull. One pissed off person wrote on Reddit, 

“The very fact of the matter is, everybody has been scammed by the SafeMoon builders, together with the mods that supported and trusted SafeMoon.”

One other person acknowledged that SafeMoon had badly scammed him and a number of other different customers, commenting, 

“By no means wanna even discuss how dangerous all of us received scammed and, particularly the cash I misplaced. To people who nonetheless assume SafeMoon has an opportunity and can ‘go to the moon’: search assist.”

Santiago Melgarejo, a former non-fungible token analyst and gross sales specialist for SafeMoon, mentioned that the warning indicators have been there all alongside, particularly when lots of the staff have been abruptly fired regardless of working for a month with none pay.

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