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News Feed - 2023-11-02 02:11:45

Derek Andersen6 hours agoSafeMoon executive team charged with multiple fraud counts, arrests madeAccording to charges, the men misappropriated $200 million in investor funds to spend on a luxurious lifestyle.3385 Total views40 Total sharesListen to article 0:00NewsJoin us on social networksThe United States Securities and Exchange Commission announced on Nov. 1 that it was charging SafeMoon and three of its executives with fraud and unregistered securities sales in connection with its SAFEMOON token. The Justice Department unsealed charges against the men at the same time. 


According to SEC allegations, SafeMoon creator Kyle Nagy, CEO John Karony and chief technology officer Thomas Smith withdrew assets worth $200 million from the project and misappropriated investor funds. The Justice Department is charging the men with conspiracy to commit securities fraud, conspiracy to commit wire fraud and money laundering conspiracy.


Karony and Smith have been arrested, according to the Justice Department announcement, while Nagy remains at large.


The SEC claimed marketing for SafeMoon promised funds would be locked in the liquidity pool and not accessible to anyone, even the defendants, while in reality, much of the pool was not locked. 


U.S. Attorney Breon Peace said:“As alleged, the defendants deliberately misled investors and diverted millions of dollars to fuel their greedy scheme and enrich themselves by purchasing a custom Porsche sports car, other luxury vehicles and real estate.”


SafeMoon, described as a “TikTok meme coin,” gained 55,000% in value between March 12 and April 20, 2021, to reach a capitalization of over $5 billion before plummeting when vulnerabilities were discovered in the code of a smart contract. The Justice Department claimed the market cap rose to $8 billion.


According to the SEC, Karony and Smith misappropriated funds to make SAFEMOON purchases to prop up its price. Karony is also accused of wash trading.


SafeMoon has faced controversy before. In February 2022, SafeMoon, Karony and several celebrities were sued, alleging they had carried out a pump-and-dump scheme with the token. SafeMoon was hacked in March 2023, but the hacker agreed to return 80% of the funds the next month.# Cryptocurrencies# SEC# RegulationAdd reactionAdd reactionRead more3 things we might see from crypto as 2023 winds to an endBitcoin beyond 35K for Christmas? Thank Jerome Powell if it happensElon Musk, Mark Cuban team up to contest SEC trial strategies