SafeMoon Plummets After Company Files for Bankruptcy
The company SafeMoon has recently filed for bankruptcy, causing its cryptocurrency SFM to lose more than 50% of its value.
The founders of SafeMoon are facing charges of securities fraud and money laundering.
SafeMoon Plummets
Last Thursday, SafeMoon, the creator of the SFM cryptocurrency, filed for bankruptcy under Chapter 7 in a Utah court.
This announcement resulted in a steep fall in the value of the SFM token, which hit an all-time low of $0.00003.
Unlike Chapter 11 bankruptcies, often used by other crypto companies to restructure and start over, Chapter 7 entails the liquidation of the company’s assets to repay creditors, indicating a likely end for SafeMoon.
There are believed to be between 50 and 99 creditors, with assets totaling up to $50 million.
Legal Consequences for SafeMoon Founders
The bankruptcy of SafeMoon comes amidst troubling circumstances. The company’s executives, including CEO John Karony, CTO Thomas Smith, and founder Kyle Nagy, are facing charges from the DOJ that include securities fraud and money laundering.
They are alleged to have embezzled millions of dollars from investors and lied to clients, according to U.S. authorities.
“As alleged, the defendants lied to SFM investors about whether SFM’s use of ‘locked’ liquidity was inaccessible to the defendants, as well as their personal holdings and trading of SFM.”
– prosecutors stated
These events have inevitably resulted in a loss of investor confidence and a sharp decline in the value of the SFM token.
The impact of these charges and SafeMoon’s bankruptcy serves as a stark reminder of the risks associated with investing in crypto projects that promise too much, highlighting the need for thorough due diligence.
