SafeMoon Token Plummets Over 50% Following Founder’s Arrest
In a major development that has sent shockwaves through the cryptocurrency world, federal agencies in the United States, including the Federal Bureau of Investigation (FBI), the Securities and Exchange Commission (SEC), the Internal Revenue Service (IRS), and the United States Department of Justice’s Eastern District of New York, have announced charges and arrests related to the SafeMoon (SFM) project. SafeMoon, a memecoin cryptocurrency, gained significant notoriety during the 2021-2022 period, but now, its key figures find themselves facing serious accusations.
The three central figures behind SafeMoon, namely the founder Kyle Nagy, CEO Braden John Karony, and CTO Thomas Smith, have been charged with conspiracy to commit securities fraud, wire fraud, and money laundering.
Founders and Executives of Digital-Asset Company Charged in Multi-Million Dollar International Fraud Scheme
— US Attorney EDNY (@EDNYnews) November 1, 2023
The SEC has additionally accused SafeMoon’s SFM token of being a security in disguise, asserting that the founders’ activities amounted to the unlawful sale of unregistered securities. This marks a significant development in the ongoing scrutiny of the cryptocurrency industry by regulatory authorities.
One of the key allegations against these individuals is that they deceived investors by claiming that they couldn’t access the locked SFM tokens, while, in reality, the tokens were accessible. By the time the currency’s market capitalization reached an astonishing $8 billion, the founders had sold off the locked tokens for personal gain, amassing over $200 million.
Furthermore, the project’s team allegedly used this substantial sum to buy SFM on the market, artificially inflating its price and engaging in market manipulation. SafeMoon had previously been rumored to be involved in pump-and-dump schemes.
In a significant development, the FBI has reported the arrests of Karony and Smith, while Nagy remains at large, with authorities actively pursuing him.
The repercussions of these allegations have already affected the value of the SFM token, which has plummeted by more than 50% in response to news of the development. The charges and arrests signal a new chapter in the legal regulation of the cryptocurrency space, underscoring the determination of regulatory agencies to address fraudulent and unlawful activities within the industry.
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