Safemoon Files For Chapter 7 Bankruptcy Amid Allegations of Fraud

The post Safemoon Files For Chapter 7 Bankruptcy Amid Allegations of Fraud appeared first on Coinpedia Fintech News

SafeMoon has officially filed for Chapter 7 bankruptcy protection. The move follows a wave of accusations surrounding fraud and mismanagement that have plagued the company since its inception.

The SEC alleges that SafeMoon executives deceived investors about the accessibility of SFM’s ‘locked’ liquidity, utilizing the funds for personal gain as SafeMoon’s market cap soared to $8 billion. The legal drama escalated with the arrests of Karony and Smith in Provo, Utah, and Bethlehem, New Hampshire, respectively, while Nagy remains elusive. U.S. Attorney Peace commended the SEC for collaboration and pledged to pursue justice in the digital asset space.

In the wake of the SEC’s legal action, SafeMoon faced a seismic event, causing its market value to plummet dramatically. Consequently, the cryptocurrency officially filed for Chapter 7 bankruptcy on December 15, 2023. The Chief Restructuring Officer acknowledged these challenges in an email, stating that they compelled the company to cease operations and seek Chapter 7 bankruptcy protection. The filing was subsequently confirmed on the United States Bankruptcy Court District of Utah’s website.

The ongoing after-effects of SafeMoon’s downfall are evident in its current trading price of $0.000000003989, reflecting a staggering 17.79% decrease in the past few hours. This decline compounds a week-long downtrend, witnessing the coin’s value drop from $0.000080. The recent plunge stands as the second-largest single-day decline, emphasizing the far-reaching consequences of SafeMoon’s financial troubles.

The bankruptcy filing is pending a hearing today in the United States Bankruptcy Court, District of Utah, in front of Chief Judge Joel T. Marker. The collaborative efforts of Homeland Security Investigations and IRS-CI, New York, have facilitated the detection of the white-collar crime committed by the once-reputed leaders. The lingering question persists: even after the ground-breaking FTX fraud case, why have securities and regulations not been improved?