Safemoon Files For Chapter 7 Bankruptcy Amid Allegations of Fraud
The post Safemoon Files For Chapter 7 Bankruptcy Amid Allegations of Fraud appeared first on Coinpedia Fintech News
SafeMoon has officially filed for Chapter 7 bankruptcy protection. The move follows a wave of accusations surrounding fraud and mismanagement that have plagued the company since its inception.
SafeMoon’s rapid growth was not fueled by sound technology or innovative strategies but rather by a meticulously orchestrated scheme of deception and manipulation. Investors were misled about the safety of their funds in SafeMoon’s liquidity pool, which, as revealed later, could be withdrawn—a blatant falsehood.
In a significant blow, the SEC filed a civil suit in November 2023 against Nagy, Smith, and Karony. The suit alleges a massive securities fraud scheme, accusing the trio of raising over $200 million through unregistered securities offerings and misappropriating millions for personal use.
In an internal communication to SafeMoon employees, Chief Restructuring Officer Kenneth Ehrler announced the bankruptcy filing, simultaneously terminating all employment contracts effective immediately. Ehrler also instructed employees to file claims for unpaid wages and benefits with the bankruptcy court.
