Cryptocurrency company SafeMoon filed for bankruptcy on Thursday. Or activate Chapter 7 bankruptcy, as it is known in the United States of America. While the company’s executives face criminal charges.
SafeMoon stated that it has assets worth between $10 million and $50 million. While it is owed to approximately 50 and 99 creditors in amounts ranging between $100,000 and $500,000. According to what was stated in the bankruptcy filing in the Bankruptcy Court of the US State of Utah.
Declaring Chapter 7 bankruptcy results in the liquidation of the debtor’s assets to repay creditors. Unlike Chapter 11 bankruptcy filings by other cryptocurrency companies, there is no intention to restructure the company and run it again.
Millions Dollar SafeMoon Scam
Last month, US authorities arrested SafeMoon executives on charges of conspiracy to commit securities fraud and conspiracy to launder money.
Related to allegations that CEO John Karony and CTOs Thomas Smith and Kyle Nagy misused millions in investor assets and lied to clients.
Thomas Smith, Kyle Nagy, and Braden Carone are the people behind the SafeMoon cryptocurrency token, a digital asset valued at more than $8 billion. But today the market value of this asset does not exceed $30 million.
The accusations revolve around allegations that the founders transferred millions of dollars to cover personal expenses. Including luxury cars and real estate. They also obtained investors’ money dishonestly.
Also, the US Department of Justice and the Securities and Exchange Commission accuse the trio of deceiving investors about the liquidity of the token and making false promises about its features, claiming that this would push the price to record levels.
While Nagy is currently evading authorities, Carone and Smith have been arrested. The charges against them include conspiracy to commit securities fraud, wire fraud, and money laundering.
The original digital currency of the SafeMoon project bears the same name and is symbolized by SFM. Its price fell by 42% in the past 24 hours. Although it does not have a lot of liquidity or a particularly large market capitalization.
The price of the SFM coin lost more than 98% of its value at the peak it reached after the project was launched.
SafeMoon is a DeFi (decentralized finance) protocol and its currency belongs to the category of cryptocurrencies known as “memecoins”. It aims to encourage currency owners not to sell them and keep them in exchange for returns.
