- SafeMoon files for Chapter 7 bankruptcy in the U.S. Bankruptcy Court in the District of Utah.
- The filing follows the DoJ’s arrest of the key executives of SafeMoon on allegations of fraud and mismanagement.
- The company also asserted that they were no longer capable of making salary payments, asking the employees to file claims in bankruptcy court.
SafeMoon, a cryptocurrency and blockchain company, reportedly filed for Chapter 7 bankruptcy following accusations of fraud and mismanagement. Following the arrest of the company’s key executives back in November, SafeMoon filed the “liquidation bankruptcy” in the United States Bankruptcy Court in the District of Utah.
In early November, the Department of Justice (DoJ) arrested SafeMoon CEO John Karony and Chief Technology Officer Thomas Smith in connection with a complaint from the Securities and Exchange Commission (SEC). The U.S. SEC charged the executive team “for perpetrating a massive fraudulent scheme through the unregistered sale of the crypto asset security, SafeMoon.”
Elaborating on the allegations, Breon Peace, United States Attorney for the Eastern District of New York, asserted that 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.” Attorney Peace reiterated the court’s dedication to implementing regulation in the crypto trade and bringing those culprits who “defraud investors” to justice.
In an official email, the company informed its employees about the bankruptcy filing and the further implications of the procedure. The company asserted that the bankrupt firm was no longer capable of making salary payments, asking the employees to file claims in bankruptcy court. The mail read, “You will need to file a claim in bankruptcy court for your unpaid wages.”
Following the bankruptcy filing, the SFM token saw a sudden decline of more than 50% in one day. According to CoinMarketCap, SFM, at the reported time, is currently trading at $0.00003258, witnessing a significant fall of 43.63% in seven days.
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