Safemoon, a platform that was launched in 2021 and promised investing safe mooning and high returns by sharing half of their transactions charges with investors have been called out by the SEC for fraud and securities violation.
SafeMoon’s price plummeted by 30% after the news of the SEC charges and the DOJ indictment broke out. The future of SafeMoon and its investors is uncertain as the investigations continue to cause the project to experience severe downs.
Safemoon launched in 2021 when the hopium of crypto hype was much and in the face of the bull market promised to share half of their transactions charges with investors.
Many people who chased the hype FOMO in and later when they were doing their due diligence they noticed something that made them realize they have made a terrible mistake investing in the safemoon project. What did they realize?
Safemoon has done 550x between March and April in the heat of 2021 before investors realized that the tokens liquidity wasn't locked as the team has earlier declared.
They created a huge sell pressure and dragged the $5.7 billion market cap down by 50%.
The SEC filed civil charges against SafeMoon LLC, its creator Kyle Nagy, its U.S. affiliate SafeMoon US LLC, and its CEO John Karony and CTO Thomas Smith for fraud and unregistered offering of crypto securities.
The DOJ unsealed an indictment charging Karony, Nagy, and Smith with conspiracy to commit securities fraud, conspiracy to commit wire fraud, and money laundering. The DOJ said that Karony and Smith were arrested in Utah and New Hampshire respectively, while Nagy remains at large. They face up to 25 years in prison if convicted.
This issue of coordinated rugpulls is one that is slowly eating up the market. Many people are now launching tokens to scam people and feed their greed.
The SEC claims that the safemoon team misappropriated the funds from the project's liquidity to buy exotic cars, mansion, real estate and personal investment.
Safemoon has now joined the list of rug project to become a ticking time bomb waiting to go off at the slightest chance.
This is a reminder for all to always prioritize your due diligence over any buy signal you receive.
All beware of projects that thrive only on hopium and zero utility and promises to reward holders.
Hope you learnt something today, I am ticktalker and I always post crypto/educative contents.
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