April 19, 2024
Crypto Firm SafeMoon Files for Chapter 7 Bankruptcy
Altcoins News

Crypto Firm SafeMoon Files for Chapter 7 Bankruptcy

On Thursday, SafeMoon, a cryptocurrency company associated with a token bearing the same name, filed for Chapter 7 bankruptcy amid criminal charges against its executives in the United States.

In the filing made in the Utah Bankruptcy Court, SafeMoon revealed it has 50 to 99 creditors, assets ranging from $10 million to $50 million, and debts totaling between $100,000 and $500,000. Chapter 7 bankruptcies typically involve the liquidation of a debtor’s assets to repay creditors and differ from Chapter 11 bankruptcies, where the aim is often to restructure and relaunch the company.

Last month, U.S. authorities arrested SafeMoon’s executives, including CEO John Karony, CTO Thomas Smith, and creator Kyle Nagy, on charges of securities fraud conspiracy, wire fraud conspiracy, and money laundering conspiracy. The allegations accuse them of misappropriating millions in investor assets and deceiving customers. Notably, Nagy has been charged but has not yet been arrested.

Additionally, the company is facing a Securities and Exchange Commission (SEC) lawsuit that alleges fraud and violations of securities laws. SafeMoon’s cryptocurrency, SFM, experienced a significant decline of 42% over the past 24 hours. Despite this, it should be noted that SFM lacks substantial liquidity and does not have a particularly large market capitalization.

Image by Simon Hill from Pixabay

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