SafeMoon files for bankruptcy, sending SFM tumbling
The company filed for Chapter 7 bankruptcy in Utah
photo_gonzo/Shutterstock modified by Blockworks
SafeMoon filed for bankruptcy in Utah on Thursday.
The company filed for Chapter 7 bankruptcy, which essentially means that the bankruptcy is focused on liquidation to distribute to creditors.
In the filing, SafeMoon said that it has property that needs attention including “cryptocurrency, intellectual property and other intangible assets.”
The assets are expected to be worth $10 to $50 million, with anywhere from $100,000 to $500,000 in estimated liabilities.
It listed roughly 50 to 99 creditors in the filing.
The filing comes a little over a month after the US Securities and Exchange Commission filed a suit against both SafeMoon and some of its top executives.
Read more: SafeMoon accused of securities fraud in SEC lawsuit
The SEC alleged that Safemoon, creator Kyle Nagy, CEO John Karony and Chief Technology Officer Thomas Smith “perpetrat[ed] a massive fraudulent scheme.”
The US Department of Justice arrested Karony and Smith, though Nagy remains at large, per a press release last month from the department.
The SEC and DOJ both claim that the executives “misled investors” and used money to buy luxury vehicles — including a “custom Porsche” and multiple McLarens — and luxury real estate.
“Critically, Nagy represented in marketing materials, his white paper, and website that these retained assets would be ‘locked’ and inaccessible for at least four years. Smith and Karony repeated and disseminated these false representations in social media posts and other communications with the public,” the SEC complaint said.
According to data from CoinGecko, SafeMoon’s token (SFM) is down roughly 36% in the past 24 hours, and down 98% from its all time high.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- 0xResearch: Alpha in your inbox. Think like an analyst.