SafeMoon files for bankruptcy, sending SFM tumbling

The company filed for Chapter 7 bankruptcy in Utah

December 15, 2023 10:16 am

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.

Newsletter

Subscribe to The Breakdown

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.

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.

Tags

Newsletter

The Breakdown

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Digital Asset Summit 2026

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

buy tickets learn more

recent research

Research

Kinetiq Protocol: From LST Infrastructure to HIP-3 Deployer

Kinetiq has established itself as Hyperliquid's dominant liquid staking protocol, holding 82.5% of LST market share with $610M in TVL. The protocol is now expanding beyond its kHYPE staking core into higher take-rate verticals: iHYPE for institutional custody rails, Launch for HIP-3 capital formation, and Markets for builder-deployed perpetuals. We view Markets, launching Jan. 12, as the highest-potential product line given its mechanically scalable, activity-linked unit economics. Near-term revenue remains anchored by kHYPE's KIP-2 fee schedule (~$1.6M annualized), while Markets provides embedded optionality if HIP-3 economics normalize post-Growth Mode. KNTQ's setup is relatively clean: zero insider unlocks until November 2026, 6.2% buyback yield from staking revenue, and cleared airdrop overhang. Risks center on unproven Markets execution, declining kHYPE TVL despite ongoing incentives, and competition from Hyperliquid's native initiatives.

by Shaunda Devens