SafeMoon Executives Charged by SEC for Fraud and Money Laundering, Execs Arrested by DOJ
Davier M
Thu, November 2, 2023
SafeMoon Executives Charged by SEC for Fraud and Money Laundering, Execs Arrested by DOJ
The Securities and Exchange Commission (SEC) has charged SafeMoon and its executives with "fraud and unregistered offering of crypto securities," alleging their involvement in a fraudulent operation that caused significant losses to investors.
The SEC statement mentioned that “instead of delivering profits, they wiped out billions in market capitalization, withdrew crypto assets worth more than $200 million from the project, and misappropriated investor funds for personal use.”
At the same time, the U.S. Department of Justice (DOJ) has revealed an indictment against SafeMoon creator Kyle Nagy, CEO John Karony, and CTO Thomas Smith, charging them with conspiracy to commit securities fraud, wire fraud, and money laundering.
Karony was detained in Provo, Utah, and Smith in Bethlehem, New Hampshire. Nagy is still missing.
The defendants are accused of deceiving SafeMoon investors about the availability of "locked" liquidity, as well as their personal ownership and trading of SafeMoon tokens, according to the DOJ indictment.
While SafeMoon's market value exceeded $8 billion, the DOJ claims that the executives fraudulently diverted and stole millions of dollars in locked liquidity for personal gain, including luxury vehicle purchases, real estate investments and personal expenses.
To conceal their involvement, SafeMoon officials allegedly employed sophisticated transaction routing and pseudonymous centralized exchange accounts.
SafeMoon is a well-known memecoin project in 2021, and gained the attention of investors by sharing 50% of transaction fees to token holders. It reached a peak price of $0.00338 in January 2022. However, the onset of the bear market and news of the DOJ indictment and SEC charges has resulted in a decline, with the price now at $0.00019.
Investigations by both the SEC and DOJ into SafeMoon are ongoing, and if the defendants are convicted, they could face a maximum prison sentence of 25 years.
Davier M
Thu, November 2, 2023
SafeMoon Executives Charged by SEC for Fraud and Money Laundering, Execs Arrested by DOJ
The Securities and Exchange Commission (SEC) has charged SafeMoon and its executives with "fraud and unregistered offering of crypto securities," alleging their involvement in a fraudulent operation that caused significant losses to investors.
The SEC statement mentioned that “instead of delivering profits, they wiped out billions in market capitalization, withdrew crypto assets worth more than $200 million from the project, and misappropriated investor funds for personal use.”
At the same time, the U.S. Department of Justice (DOJ) has revealed an indictment against SafeMoon creator Kyle Nagy, CEO John Karony, and CTO Thomas Smith, charging them with conspiracy to commit securities fraud, wire fraud, and money laundering.
Karony was detained in Provo, Utah, and Smith in Bethlehem, New Hampshire. Nagy is still missing.
The defendants are accused of deceiving SafeMoon investors about the availability of "locked" liquidity, as well as their personal ownership and trading of SafeMoon tokens, according to the DOJ indictment.
While SafeMoon's market value exceeded $8 billion, the DOJ claims that the executives fraudulently diverted and stole millions of dollars in locked liquidity for personal gain, including luxury vehicle purchases, real estate investments and personal expenses.
To conceal their involvement, SafeMoon officials allegedly employed sophisticated transaction routing and pseudonymous centralized exchange accounts.
SafeMoon is a well-known memecoin project in 2021, and gained the attention of investors by sharing 50% of transaction fees to token holders. It reached a peak price of $0.00338 in January 2022. However, the onset of the bear market and news of the DOJ indictment and SEC charges has resulted in a decline, with the price now at $0.00019.
Investigations by both the SEC and DOJ into SafeMoon are ongoing, and if the defendants are convicted, they could face a maximum prison sentence of 25 years.
SEC says SafeMoon executives withdrew $200 million from crypto project to spend on McLarens and luxury homes
Marco Quiroz-Gutierrez
Wed, November 1, 2023 a
Photo Illustration by Fortune
The company behind SafeMoon promised astronomical returns, but instead the cryptocurrency imploded mid-flight. And now those behind the controls are facing the consequences.
In a Wednesday complaint, the Securities and Exchange Commission charged the company behind the coin, SafeMoon LLC, along with creator Kyle Nagy, CEO John Karony, and CTO Thomas Smith, with violating securities laws in "a massive fraudulent scheme."
Although the defendants promised to steer the token “safely to the moon,” the SEC alleges that company leaders secretly took out more than $200 million in crypto assets from the project to pay for, among other things, McLaren cars, luxury homes, and extravagant travel.
The cryptocurrency accumulated a $5.7 billion market cap at its peak, following a more than 55,000% surge from March 12 to April 20, 2021. Things then quickly began to unravel when investors discovered that large portions of SafeMoon’s liquidity pool were never locked, sinking the token's price by 50%.
Nagy, according to the SEC, had promised investors that their funds were safely locked in SafeMoon’s liquidity pool, and that not even top executives could access them.
The complaint also alleges that Karony and Smith used misappropriated assets to buy large quantities of SafeMoon in an attempt to stabilize the token's price, and that Karony created a trading account to buy and sell tokens "to create the impression of market activity, a practice known as wash trading."
The defendants stand accused of violating the registration and anti-fraud provisions of the Securities Act of 1933 and the anti-fraud provisions of the Securities Exchange Act of 1934.
The SEC has stepped up its crypto enforcement actions this year despite criticism from industry players. In June, the agency sued the world’s biggest crypto exchange, Binance, and CEO Changpeng “CZ” Zhao for several alleged securities violations. The agency also sued U.S.-based crypto exchange Coinbase.
This story was originally featured on Fortune.com
Marco Quiroz-Gutierrez
Wed, November 1, 2023 a
Photo Illustration by Fortune
The company behind SafeMoon promised astronomical returns, but instead the cryptocurrency imploded mid-flight. And now those behind the controls are facing the consequences.
In a Wednesday complaint, the Securities and Exchange Commission charged the company behind the coin, SafeMoon LLC, along with creator Kyle Nagy, CEO John Karony, and CTO Thomas Smith, with violating securities laws in "a massive fraudulent scheme."
Although the defendants promised to steer the token “safely to the moon,” the SEC alleges that company leaders secretly took out more than $200 million in crypto assets from the project to pay for, among other things, McLaren cars, luxury homes, and extravagant travel.
The cryptocurrency accumulated a $5.7 billion market cap at its peak, following a more than 55,000% surge from March 12 to April 20, 2021. Things then quickly began to unravel when investors discovered that large portions of SafeMoon’s liquidity pool were never locked, sinking the token's price by 50%.
Nagy, according to the SEC, had promised investors that their funds were safely locked in SafeMoon’s liquidity pool, and that not even top executives could access them.
The complaint also alleges that Karony and Smith used misappropriated assets to buy large quantities of SafeMoon in an attempt to stabilize the token's price, and that Karony created a trading account to buy and sell tokens "to create the impression of market activity, a practice known as wash trading."
The defendants stand accused of violating the registration and anti-fraud provisions of the Securities Act of 1933 and the anti-fraud provisions of the Securities Exchange Act of 1934.
The SEC has stepped up its crypto enforcement actions this year despite criticism from industry players. In June, the agency sued the world’s biggest crypto exchange, Binance, and CEO Changpeng “CZ” Zhao for several alleged securities violations. The agency also sued U.S.-based crypto exchange Coinbase.
This story was originally featured on Fortune.com
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