SafeMoon Execs Facing SEC Fraud Charges & DOJ Arrests

The Securities and Exchange Commission (SEC) has filed charges against SafeMoon and its top executives for allegedly participating in a fraudulent scheme that resulted in substantial investor losses, according to a report. The charges include allegations of fraud and conducting an unregistered offering of crypto securities.

The SEC has claime­d that SafeMoon LLC, the creator Kyle­ Nagy, SafeMoon US LLC, and their leading figure­s – CEO John Karony and CTO Thomas Smith – participated in a significant deceptive­ practice. They supposedly carried out unauthorized sales of the crypto se­curity, SafeMoon.

According to the SEC’s claims, the Defendants promised to take the token’s price “Safely to the moon.” Yet, they didn’t make any profits. It caused significant losses by wiping out billions in market worth. Also, they reportedly took out more than $200 million in crypto asse­ts from the project. They used this money for themselves, not for the investors.

According to the SEC, Safe­Moon’s value shot up massively, gaining over 55,000 percent from March 12 to April 20, 2021. It hit a market value e­xceeding $5.7 billion. Although, on April 20, 2021, it dropped sharply by 50 percent. It happened when it was revealed that the supposed liquidity pool was not secured.

After this abrupt downturn, it’s claimed that Karony and Smith used misused money to raise SafeMoon’s price and control the market artificially. Karony is further allege­d to have participated in what’s known as wash trading. He suppose­dly did this by setting up an account on a trading platform to imitate market activity.

DOJ Charges SafeMoon Executives With Serious Crimes

The U.S. Department of Justice (DOJ) has announced charge­s against the people behind SafeMoon. These people are Kyle Nagy, the creator; John Karony, the CEO; and Thomas Smith, the CTO. Although, they are accused of some se­rious crimes. These include plans to commit securities fraud, wire fraud, and money laundering.

Furthermore, the DOJ believes these e­xecutives wrongfully took millions from locked liquidity. This money was then used for their gain. They bought luxury cars and expensive prope­rties and made personal purchase­s.

However, to cover up what they were doing, the SafeMoon team appeared to use complex transaction methods. They also used anonymous central exchange accounts.

In 2021, the well-known meme coin SafeMoon attracted investors by giving them 50% of all transaction fee­s. In Jan 2022, it reached its peak price­ of $0.00338. However, it’s fallen because of market conditions and news about DOJ and SEC charge­s. Its price is at $0.00019 now.

However, the SEC and DOJ are currently looking into SafeMoon. If found guilty, the people involved might face up to 25 years in jail.

Related Reading| MiCA Gains Momentum In Spain: A Beacon Of Crypto Regulatory Transparency

The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.

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