a Safe Moona cryptocurrency from the Decentralized Finance (DeFi) sector, lost 47% of its value in a few minutes this Wednesday (1st) following a lawsuit from the US Securities and Exchange Commission, the SEC.
The SEC summarizes the allegations and points out that the Safe Moon and its directors have violated numerous securities laws, including selling the cryptocurrency in question and personally spending investors’ money.
“The defendants promised to take the token’s price ‘safely to the moon,’ but instead of generating profits, they disappeared with billions in market cap, drained more than $200 million worth of cryptocurrencies from the project, and embezzled investor funds inappropriately for personal use.”
In free translation, SafeMoon can be understood as “Safe Moon”, that is, the project would already try to deceive investors in its name. In any case, the price chart shows that the cryptocurrency has suffered a different fate.
However, the above drop does not illustrate the real loss of investors. The project that operated under the MOON ticker was renamed SFM. In short, old investors traded 1,000 MOONs for 1 SFM, including other changes to their economic model.
For example, as recently as 2021, SafeMoon’s leader left the project, sparking rumors about the end of the coin. In the same year, the coin rose by 3,000%, raising suspicions that it was a scam. In other words, the SEC may have been slow to recognize the problems the community noticed years ago.
SEC sues SafeMoon
The 33-page lawsuit shows that the SEC is suing both SafeMoon and its top executives: Kyle Nagy, Braden John Karone It is Thomas Glenn Smith.
The accusations are that they created this “a fraudulent scheme that raked in millions through the unregistered offering and sale of a cryptocurrency security called SafeMoon”.
The SEC then highlights that SafeMoon was worth $5.7 billion after rising 55,000%, but fell rapidly once the scheme was exposed.
Anyway, only investors lost on this deal. The main organizers of the scheme continued to enjoy a luxurious life with the money they earned from their project.
“Meanwhile, the defendants profited from the project’s misappropriation of cryptocurrencies worth tens of millions of dollars.”
According to the indictment, there were 2.8 million unique wallets at SafeMoon. Therefore, this measure, while inaccurate, can provide an idea of how many investors have been harmed by the scheme.
“As SafeMoon’s value grew exponentially, Defendants used their Liquidity Pool Tokens [LP] to redeem tens of millions of dollars in SafeMoon LP tokens, which they then used for various purposes, including SafeMoon price manipulation, business expenses, investments in unrelated businesses, and personal use such as buying luxury homes, McClaren sports cars, and extravagant to travel “the process continues.
The defendants claimed that these cryptocurrencies would be locked for a period of 4 years. However, transaction records show that this did not happen and they spent their coins as they pleased.
SafeMoon cryptocurrency loses 47% of its value in minutes
Although SafeMoon has been in freefall since the launch of “version 2” (V2), SafeMoon experienced another major fall this Wednesday (1st). According to data from CoinMarketCap, the project suffered another 30% drop within minutes.
The project team has not commented publicly on the lawsuit. On his social networks, the last message is a wish for a happy Halloween, which took place next Tuesday (31).
Yesterday, SEC President Gary Gensler even joked with the date and sent a message to companies in the industry. Therefore, it is possible that Gensler left a mystery as to what would happen to SafeMoon next Wednesday (1st).
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
