SafeMoon files for bankruptcy, sending SFM tumbling

The company filed for Chapter 7 bankruptcy in Utah

article-image

photo_gonzo/Shutterstock modified by Blockworks

share

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.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2023

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research Report Cover Vertex.jpg

Research

The proliferation of new perp DEXs has led to fragmented liquidity across various DEXs and chains. Vertex, known for its vertically-integrated DEX that includes spot, perpetual, and integrated money markets, is now tackling cross-chain liquidity fragmentation through horizontal integration with the launch of new Edge instances. Vertex's integrated offerings and cross-margined account structure amplify the benefits of new instances: native cross-chain spot trading, optimized cross-chain basis trading, consistent interest rates, reduced bridging friction, and more.

article-image

Partnering with EtherFi and Angle, the fully on-chain perp DEX features bespoke collateral

article-image

Sponsored

Gavin Wood introduced the next evolutionary step for the Polkadot network: the Join-Accumulate Machine, or JAM

article-image

The side events were the places to be at Consensus 2024, according to attendees

article-image

Also, who’s come out swinging in the spot ether ETF fee war — and who could undercut them

article-image

I know it is not in their nature, but US regulators could learn a lot by researching the digital asset frameworks that overseas regulators have already gotten right

article-image

Also, the ETF hype train can count out at least one member