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A shocking development in the world of cryptocurrency as SafeMoon has filed for Chapter 7 bankruptcy, amidst facing criminal charges in the U.S.
SafeMoon, known for its affiliated token, revealed that it has between 50 and 99 creditors, assets ranging from $10 million to $50 million, and debts between $100,000 and $500,000, according to a filing in the Utah Bankruptcy Court, as reported here.
Chapter 7 bankruptcies involve the liquidation of a debtor’s assets to repay creditors, with no plans for restructuring and relaunching the company, unlike Chapter 11 bankruptcies that other crypto companies have opted for.
Meanwhile, SafeMoon’s executives are facing serious legal trouble, as U.S. officials arrested them on charges including securities fraud conspiracy, wire fraud conspiracy, and money laundering conspiracy. These allegations involve misappropriation of investor assets and false information provided to customers. Notably, creator Kyle Nagy has been charged but not yet arrested.
To add to their woes, the firm is also mired in a Securities and Exchange Commission (SEC) lawsuit alleging fraud and violations of securities laws.
As a result of these developments, SafeMoon’s SFM has seen a drastic 42% decline in the past 24 hours, although it must be noted that the token does not have significant liquidity or a large market capitalization.
Edited by Parikshit Mishra.
