Share:
  • SafeMoon price took a dive after the SEC charged the token and its founder, CEO and CTO with fraud.
  • The US government announced that while the CEO and CTO have been arrested, the founder remains at large.
  • The US Attorney's Office also claimed that the team misappropriated millions of dollars of investors' funds for their own use.

SafeMoon, a Defi cryptocurrency, along with its creator Kyle Nagy as well as the CEO John Karony, and CTO Thomas Smith, have been charged by the Securities and Exchange Commission (SEC) for "perpetrating a massive fraudulent scheme through the unregistered sale of the crypto asset security".

SafeMoon team charged by SEC

The SEC, in the press release, stated,

"[SafeMoon] promised to take the price of the token "Safely to the moon," but instead of delivering profits, they wiped out billions in market capitalization, withdrew crypto assets worth more than $200 million from the project, and misappropriated investor funds for personal use.

The regulator alleged that through wash trading, the CEO created the impression of market activity by buying and selling the token on a trading platform. 

This was preceded by fraudulently manipulating the value of the token by pumping it into the market back in April 2021 after users learned that SafeMoon's liquidity pool was not locked as claimed, which led to cryptocurrency's price plummeting by 50% from a market capitalization of $5.7 billion.

SafeMoon price witnessed a 30% crash at the time of writing following the release of the news to trade at $0.0001350.

SFM/USD 1-day chart

SFM/USD 1-day chart

SafeMoon team under arrest

The CEO of SafeMoon, Karony, along with the CTO, Smith, had been arrested by the US government at the time of writing. The US Attorney's Office charged the team with misappropriating millions of dollars of investors' funds for their own use. This included the purchase of luxury vehicles and real estate in New Hampshire, Utah, and Florida. 

Additionally, the CTO sent 2,900 Binance Coin (BNB) worth more than approximately $860,000 in order to purchase a custom Porsche 911 sportscar along with some NFTs. Ivan J. Arvelo, Special Agent in Charge of Homeland Security Investigations, New York, following the arrest, stated,

"As alleged, SafeMoon's executives grew their company value to over $8 billion, but instead of rewarding their clients as promised, their insatiable greed led them to spend millions of dollars on their own lavish desires. HSI New York will relentlessly pursue individuals who seek to exploit investors and the American financial system for their own gain.

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content

Editors’ Picks

TRON price rallies to yearly high following burn of over $12.6 million tokens

TRON price rallies to yearly high following burn of over $12.6 million tokens

TRON fee revenue reached an all-time high of $1.758 million on February 20. TRON network burned over 12.62 million tokens on Tuesday, likely catalyzing the altcoin’s gains. TRON price hit a 2024 peak of $0.14048 on Wednesday and the altcoin is likely to rally higher. 

More TRON News

Ethereum price briefly touches $3,000 for third time in a week

Ethereum price briefly touches $3,000 for third time in a week

Ethereum price crossed $3,000 for the third time this week, resulting in euphoria among crypto market participants. On-chain intelligence firm Santiment noted that traders bought Ethereum at the local top, above $3,000, out of the Fear Of Missing Out (FOMO).

More Ethereum News

XRP price suffers pullback with latest update in SEC v. Ripple lawsuit

XRP price suffers pullback with latest update in SEC v. Ripple lawsuit

XRP price dropped below $0.55 on Thursday as both Ripple and SEC work on remedy-related briefs. March 13 is the next key deadline for the SEC v. Ripple lawsuit. The court will determine penalties for Ripple’s institutional sales of XRP by the April 29 deadline. 

More Ripple News

Polygon inflation ends, MATIC price primed for explosive growth?

Polygon inflation ends, MATIC price primed for explosive growth?

Polygon’s Foundation contract shelled out the last remaining 273 million MATIC tokens on Wednesday, marking the end of the vesting period. This development means that there are no more tokens to unlock i.,e all of the MATIC tokens ever minted are now in circulation.

More Polygon News

Bitcoin: BTC eyes $60,000 but correction looms

Bitcoin: BTC eyes $60,000 but correction looms

BTC has been moving up only since January 22 but could slip into a consolidation before the next leg up. With the rate at which BTC is climbing after the ETF approval, coupled with strong fundamentals, investors should consider buying the dips before BTC hits $60,000.

Read full analysis

BTC

ETH

XRP