SafeMoon's Token Plummets by 31% Following Bankruptcy Filing Amid Fraudulent Scheme Accusations
Summary:
Decentralized finance protocol SafeMoon's token value plummeted 31% in five hours following the company's bankruptcy filing. The firm was unable to pay salaries due to bankruptcy proceedings, forcing employees to claim unpaid wages through the court. This comes on the back of charges filed against SafeMoon and its executives for breaching securities laws. The cryptocurrency's value has declined by 98.2% since its peak in January 2022. Additionally, SafeMoon suffered a loss of $8.9 million due to an exploit earlier in the year.
Decentralized finance protocol SafeMoon's (SFM) token plunged by 31% within five hours following the company's filing for bankruptcy. On December 14, SafeMoon officially requested Chapter 7 bankruptcy protection with the United States Bankruptcy Court in the District of Utah. The bankruptcy petition was submitted voluntarily by attorney Mark Rose, with Chief Judge Joel T. Marker presiding over the case. A letter presumed to have been penned by the company's Chief Restructuring Officer was shared on Reddit, revealing that the company was unable to cover staff salaries due to its bankruptcy proceedings, resulting in employees having to claim unpaid earnings through the bankruptcy court. This setback follows charges filed against SafeMoon, founder Kyle Nagy, CEO John Karony, and CTO Thomas Smith in November by the U.S. securities regulator for breaching securities laws in a significant fraudulent scheme. The cryptocurrency's value dropped from $0.000065 to $0.000045 over five hours on December 14 after the announcement, per CoinGecko's data, although it did recover slightly to $0.000061 within 10 minutes. Since reaching its record high of $0.0033 on January 5, 2022, SFM has nosedived by 98.2%, with its market cap also plummeting from $1 billion to $34.5 million. Some former SafeMoon investors voiced their dissatisfaction on Reddit regarding the bankruptcy, accusing SafeMoon developers of deceptive practices. Santiago Melgarejo, an ex-nonfungible token analyst and sales specialist for SafeMoon, admitted in retrospect that there were clear signs of trouble, such as sudden staff layoffs despite many working without pay for a month. Earlier in the year, in March, SafeMoon also experienced an exploit, leading to a loss of $8.9 million.
Published At
12/15/2023 4:55:57 AM
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