David

April

SafeMoon

In a significant legal action, the U.S. Securities and Exchange Commission (SEC) has charged SafeMoon LLC, its creator Kyle Nagy, and key executives with fraud and conducting an unregistered offering of crypto asset securities. This case highlights the increasing scrutiny of cryptocurrency ventures by regulatory authorities. 
The SEC's complaint against SafeMoon LLC, its creator Kyle Nagy, SafeMoon US LLC, CEO John Karony, and CTO Thomas Smith, outlines a fraudulent scheme centered around the unregistered sale of SafeMoon, a crypto asset security. 
The Defendants are accused of misleading investors with the promise of taking the token's price "Safely to the moon." Contrary to these promises, the SEC alleges that the scheme resulted in significant market capitalization losses, with the Defendants withdrawing over $200 million in crypto assets from the project and misappropriating investor funds for personal gain. 
<h2 id="safemoon-s-market-cap-peaked-at-5-7-billion">SafeMoon's market cap peaked at $5.7 billion</h2> 
David Hirsch, Chief of the SEC Enforcement Division’s Crypto Assets and Cyber Unit (CACU), stressed the vulnerabilities in unregistered offerings, noting that such ventures lack necessary disclosures and accountability. Hirsch's statement underlines the SEC's position on the need for regulatory compliance in decentralized finance. 
The complaint further details how Nagy assured investors of the security of their funds in SafeMoon's liquidity pool, only for it to be revealed that large portions were not locked as claimed. This misrepresentation facilitated the alleged misappropriation of millions of dollars by the Defendants for lavish personal expenditures. 
The SEC’s complaint highlights the meteoric rise and fall of SafeMoon, noting a 55,000 percent price increase from March to April 2021, followed by a near 50 percent price drop upon revelations of liquidity pool mismanagement. This price fluctuation significantly impacted market capitalization, exceeding $5.7 billion at its peak. 
The complaint also alleges that Karony and Smith engaged in market manipulation post-price plunge. Accusations include making large purchases of SafeMoon to artificially inflate its price and engaging in wash trading – a deceptive practice of buying and selling securities to create an illusion of market activity. 
Jorge G. Tenreiro, Deputy Chief of the CACU, emphasized the importance of investor caution in the crypto space, warning against the allure of high profits and the realities of potential significant losses.

SEC accuses SafeMoon and executives of multi-million dollar fraud

Table of Contents

FinanceFeeds

Other articles published on Nov 2, 2023

Swiss Bank SGKB partners with SEBA for Bitcoin and Ethereum services

Solana soars 90% in a month as Firedancer testnet launches

SBF Trial: Judge Sets Stage for Jury Deliberation in Sam Bankman-Fried Case

Ethereum Network Growth Shoots With New Addresses, ETH Price to $2000?

CBN Denies Rumors to Plan Redenominate Naira for 2024

Is Altcoin Season Here Yet? What Glassnode Suggests

Join our free newsletter for daily crypto updates!