The United States Securities and Exchange Commission (SEC) has charged SafeMoon and three of its executives with fraud and unregistered securities sales. The SEC alleges that SafeMoon creator Kyle Nagy, CEO John Karony, and chief technology officer Thomas Smith withdrew $200 million from the project and misappropriated investor funds. The Justice Department has unsealed charges against the men, including conspiracy to commit securities fraud, wire fraud, and money laundering conspiracy. Karony and Smith have been arrested, while Nagy remains at large. The SEC claims that SafeMoon’s marketing promised locked funds in the liquidity pool, but in reality, much of the pool was not locked.
SafeMoon, known as a “TikTok meme coin,” experienced a substantial increase in value from March to April 2021, reaching a capitalization of over $5 billion. However, its value plummeted when vulnerabilities were discovered in the code of a smart contract. The SEC alleges that Karony and Smith misused funds to make SAFEMOON purchases in an attempt to prop up its price. The executives are also accused of wash trading. This is not the first time SafeMoon has faced controversy, as it was previously sued in 2022 for allegedly carrying out a pump-and-dump scheme. Additionally, the company experienced a hack in March 2023, but the hacker agreed to return 80% of the stolen funds the following month.
#SafeMoon #SECcharges #fraud #securities #investorfunds #arrests #crypto #cryptocurrency
Image: https://weeklyfinancenews.online/wp-content/uploads/2023/09/fin3-e1691665067605-15.jpg
Comments are closed.