SafeMoon Crashes 77% to $0.00004327 as SEC Charges Team for $200M Fraud

SafeMoon plummeted over 77% after the SEC charged the project’s team with fraud, alleging they rugged and misappropriated $200 million.

The crypto market has sustained the green trend that commenced last week, with many assets recording surprising price gains. However, the SafeMoon token is seeing an equally shocking price performance amid the market bull rally. 

In particular, CoinMarketCap data shows SafeMoon’s price has experienced a dramatic 77.80% decrease within the past 24 hours. This bearish performance is particularly concerning, considering that SafeMoon had been on a bullish trajectory in the past 30 days.

U.S. Regulator Charges SafeMoon Team for Fraud

The cause of the steep decline in SafeMoon’s value remains glaring. On November 1, the U.S. SEC took legal action against the parent company, SafeMoon LLC. The regulator also charged the company’s executive team. It included SafeMoon’s founder, Kyle Nagy; Chief Executive Officer, John Karony; and Chief Technology Officer, Thomas Smith.

According to the official report, the SEC asserted that the individuals orchestrated “a massive fraudulent scheme” via SafeMoon token. The SEC claimed SafeMoon was a security its founder and executives failed to register.

Furthermore, the U.S. regulator alleged that the defendants had promised SafeMoon investors significant profits under the guise of taking the token “Safely to the moon.” However, instead of delivering on this promise, they allegedly rugged the project, causing substantial market losses.

Specifically, the SEC mentioned the SafeMoon team withdrew over $200 million in crypto assets from the project and misappropriated investor funds for personal use. The SEC alleged that the executives used users’ funds to finance extravagant purchases, such as McLaren cars and luxury homes.

Moreover, the SEC’s complaint stated that SafeMoon founder Nagy assured investors their funds were secure and locked in SafeMoon’s liquidity pool. In contrast, significant portions of the liquidity pool were never locked. 

David Hirsch, Chief of the SEC Enforcement Division, highlighted concerns about the DeFi sector, citing its susceptibility to fraudulent activities. Hirsch emphasized that unregistered offerings in decentralized finance lack the necessary disclosures and accountability required by the law, making them attractive to individuals like Kyle Nagy, who exploit these vulnerabilities to profit while harming others.

SafeMoon Suffers Impact

Expectedly, this development has pushed the token’s price into the abyss with a 100% crash in sight. The coin now trades at $0.00004536, from 0.0001832 yesterday.

Interestingly, amid the sustained drop, SafeMoon witnessed a massive spike in trade volume. The asset’s volume has surged 125% to $2.9 million over the last 24 hours. This indicates that market participants have trooped to the scene to sell off their holdings.