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.
Why did Safemoon file for bankruptcy?
The SEC alleges that SafeMoon executives deceived investors about their access to SFM’s “locked” liquidity, leveraging the funds for personal gain as SafeMoon’s market capitalization soared to $8 billion.
The legal troubles have intensified with the arrests of Caroni and Smith in Provo, Utah, and Bethlehem, New Hampshire, respectively, and Nagy remains elusive. U.S. Attorney Peace praised the SEC’s cooperation and pledged to pursue justice in the digital asset space.
Due to the SEC’s legal action, SafeMoon faced a huge blow and its market value plummeted. As a result, the cryptocurrency officially filed for Chapter 7 bankruptcy on December 15, 2023.
The chief restructuring officer acknowledged these problems in an email, saying they forced the company to cease operations and seek Chapter 7 bankruptcy protection. The filing was later viewed on the website of the U.S. Bankruptcy Court District in Utah.
Impact of Bankruptcy
The lasting effects of SafeMoon’s downfall are evident in its current trading price of $0.000000003989, which reflects a whopping 17.79% decline over the past few hours. This decline further deepened a week-long downward trend that saw the coin’s value fall from $0.000080. The latest plunge was the second-biggest one-day decline and highlights the far-reaching consequences of SafeMoon’s financial problems.
What’s next for Safemoon?
The bankruptcy filing awaits a hearing today in U.S. Bankruptcy Court in Utah before Chief Judge Joel T. Marker. The joint efforts of Homeland Security Investigations and New York State IRS-CI have made it easier to uncover white-collar crimes committed by once-reputed leaders. The continuing question: Why haven’t securities and regulations improved since the landmark FTX fraud?