The U.S. Department of Justice (U.S. DOJ) charged three executives of SafeMoon, a popular meme coin was charged with multiple counts of fraud and unregistered securities sales in connection with its SAFEMOON token. The news crashed the price of the token by 71% within a span of 24 hours. The U.S. Securities and Exchange Commission is also pursuing a case against SafeMoon.

Key Facts – The Charge:

• According to the U.S. SEC, SafeMoon creator Kyle Nagy, CEO John Karony, and chief technology officer Thomas Smith withdrew assets worth $200 million from the project and misappropriated investor funds.
• The Justice Department is charging the men with conspiracy to commit securities fraud, conspiracy to commit wire fraud, and money laundering conspiracy.

Karony and Smith have been arrested, according to the Justice Department announcement, while Nagy remains at large.

Safemoon Funds Used By Execs To Fund a Luxurious Lifestyle — U.S. Attorney

• The SEC claimed that the marketing for SafeMoon promised that the funds would be locked in the liquidity pool and not accessible to anyone, even the defendants, while in reality, much of the pool was not locked.
• U.S. Attorney Breon Peace said, “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.”

What is SafeMoon

• SafeMoon, described as a “TikTok meme coin,” gained 55,000% in value between March 12 and April 20, 2021, to reach a capitalization of over $5 billion before plummeting when vulnerabilities were discovered in the code of a smart contract.
• The Justice Department claimed the market cap rose to $8 billion.
• As per Coingecko, its all-time high price is $0.00338272, which means SafeMoon price is down 98.31% from its peak.
• According to the SEC, Karony and Smith misappropriated funds to make SAFEMOON purchases to prop up its price. Karony is also accused of wash trading.
• SafeMoon has faced controversy before. In February 2022, SafeMoon, Karony, and several celebrities were sued, alleging they had carried out a pump-and-dump scheme with the token.
• SafeMoon was also hacked in March 2023, but the hacker agreed to return 80% of the funds the next month.

Safemoon Price Dumps

• The news of the charges has had a drastic impact on SafeMoon’s price, which has plummeted by a staggering 71.7% in the last 24 hours.
• At the time of writing, SafeMoon is trading at $0.00005696, a far cry from its all-time high of $0.00338272 in January 2022.
• The SafeMoon account on X said it is taking the allegations seriously.

This article is published in BitPinas: SafeMoon Price Dumps 71% After U.S. Justice Dept Charged, Arrested Executives

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