YEREVAN (CoinChapter.com) — Decentralized finance (DeFi) protocol SafeMoon has filed for Chapter 7 bankruptcy. The filing comes a month after the company’s executives were arrested and now face criminal charges in the United States. As a result of the filing, the price of SFM, the native token of the network, has tanked around 50%.
Chapter 7 bankruptcy filing details
According to the filing in the Utah Bankruptcy Court, SafeMoon currently has less than 100 creditors and holds assets anywhere between $10 million and $50 million. The company’s debts, per the document, lie between $100,000 and $500,000.
Last month, the US Department of Justice (DOJ) charged SafeMoon executives with orchestrating significant fraud against the project’s investors.
The list included founder Kyle Nagy, CEO Braden John Karony, and former Chief Technology Officer Thomas Smith. The trio faces charges related to conspiracy to commit securities fraud, conspiracy to commit wire fraud, and money laundering conspiracy.
Meanwhile, according to a letter allegedly penned by the firm’s chief restructuring officer addressed to employees following the SafeMoon Bankruptcy filing, the company had not been paying their staff since the developments early last month.
The letter asks employees to “file a claim in the bankruptcy court for your unpaid wages” and retain any company property to be turned over to the trustee.
SafeMoon’s inhouse token price tanks
Following the bankruptcy proceedings, the price of SFM tanked. At the time of writing, the network’s token trades at $0.00004171.
The drop amounts to 50% in the past 24 hours. However, since the DOJ crackdown in early November, the SFM token has shed about 80% of its value.
Following the filing, the SFM token currently trades nearly 100% below its all-time high of $0.007232 on Jan. 04, 2022.
The Chapter 7 bankruptcy filing has now given way to allegations that the SafeMoon was a rug pull project, drawing anger both from investors as well as traders.
