Key Takeaways:
- The price of the SFM token, the native cryptocurrency of SafeMoon, is tanking.
- The US Department of Justice (DOJ) arrested SafeMoon executives on fraud charges.
- The US Securities and Exchange Commission (SEC) also brought charges against the company.
YEREVAN (CoinChapter.com) — SFM, the native crypto token of SafeMoon, has seen its price depreciate by 65% over the past day alone. The plunge follows news of the arrest of the project’s founders, John Karony, Kyle Nagy, and Thomas Smith, on fraud charges.
SFM, which traded at $0.0002025 before the news broke out, quickly plunged to $0.0000718. The price dump was caused by customers rushing to panic-sell their holdings.
The recent price crash takes the total year-to-date losses to about 80%.
What are the Safemoon executives accused of?
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 are now facing charges related to conspiracy to commit securities fraud, conspiracy to commit wire fraud, and money laundering conspiracy.
The DOJ alleged the accused illegally misappropriated the funds from the firm for personal use.
“As alleged, the defendants deliberately misled investors and diverted millions of dollars to fuel their greedy scheme and enrich themselves by purchasing a custom Porsche sports car, other luxury vehicles and real estate,”
the DOJ statement reads.
The development comes as a stark resemblance to the ongoing case against Sam Bankman-Fried, former head of the now-defunct crypto exchange FTX.
The accusations against the SafeMoon executives stem from the Securities Act of 1933 and the Securities Exchange Act of 1934.
SEC also charges SafeMoon of violating securities laws
Following the arrest of the SafeMoon executives by the DOJ, the US Securities and Exchange Commission (SEC) also brought charges against them.
The agency alleges that the accused misled customers and appropriated millions of investor’s funds.
“The Defendants promised to take the price of the token “Safely to the moon,” but 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,”
the SEC complaint reads.
The SEC is also investigating if the sales of the SFM token violated any laws about unregistered securities.
According to the press release, the company ran “a massive fraudulent scheme through the unregistered sale of the crypto asset security, SafeMoon.”
