The Securities and Exchange Commission (SEC) has filed civil charges against SafeMoon and its executives, while the DOJ has revealed an indictment against SafeMoon execs.
The Securities and Exchange Commission (SEC) has charged SafeMoon and its executives with "fraud and unregistered offering of crypto securities," alleging their involvement in a fraudulent operation that caused significant losses to investors.
The SEC statement mentioned that “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.”
At the same time, the U.S. Department of Justice (DOJ) has revealed an indictment against SafeMoon creator Kyle Nagy, CEO John Karony, and CTO Thomas Smith, charging them with conspiracy to commit securities fraud, wire fraud, and money laundering.
Karony was detained in Provo, Utah, and Smith in Bethlehem, New Hampshire. Nagy is still missing.
The defendants are accused of deceiving SafeMoon investors about the availability of "locked" liquidity, as well as their personal ownership and trading of SafeMoon tokens, according to the DOJ indictment.
While SafeMoon's market value exceeded $8 billion, the DOJ claims that the executives fraudulently diverted and stole millions of dollars in locked liquidity for personal gain, including luxury vehicle purchases, real estate investments and personal expenses.
To conceal their involvement, SafeMoon officials allegedly employed sophisticated transaction routing and pseudonymous centralized exchange accounts.
SafeMoon is a well-known memecoin project in 2021, and gained the attention of investors by sharing 50% of transaction fees to token holders. It reached a peak price of $0.00338 in January 2022. However, the onset of the bear market and news of the DOJ indictment and SEC charges has resulted in a decline, with the price now at $0.00019.
Investigations by both the SEC and DOJ into SafeMoon are ongoing, and if the defendants are convicted, they could face a maximum prison sentence of 25 years.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap. CoinMarketCap is not responsible for the success or authenticity of any project, we aim to act as a neutral informational resource for end-users.
