The U.S. government has just arrested the top executives of cryptocurrency SafeMoon (SFM), namely Kyle Nagy, Braden John Karony and Thomas Smith. They are accused of discreetly embezzling over $200 million from the project, appropriating investor funds to finance a flamboyant lifestyle. The price of the SFM token plummeted by almost 60% following the news.
Clap de fin pour SafeMoon et ses dirigeants
The US government has arrested the founders of cryptocurrency SafeMoon. According to a statement from the US Department of Justice, the executives orchestrated “a massive fraud that diverted millions of dollars of investor funds for personal use”.
SafeMoon LLC executives founder Kyle Nagy, CEO Braden John Karony and CTO Thomas Smith are charged with conspiracy to commit securities fraud, conspiracy to commit wire fraud and conspiracy to launder money.
SafeMoon’s teams allegedly deceived investors by promising that their SFM tokens were locked in pools with the aim of supporting cryptocurrency liquidity, and that these tokens could not be withdrawn by anyone. Court documents indicate that SafeMoon also promised investors that the SFM token’s features would “drive its price to stratospheric heights” and “safely to the Moon”.
SafeMoon LLC executives allegedly secretly took over $200 million from the project and diverted investor funds to finance their lavish lifestyles: sports cars, luxury homes and extravagant travel.
Breon Peace, U.S. Attorney for the Eastern District of New York, says:
“The defendants deliberately misled investors and misappropriated millions of dollars to fuel their greedy scheme and enrich themselves by purchasing a custom Porsche sports car, other luxury vehicles and real estate. “
In addition, Braden John Karony and Thomas Smith allegedly used misappropriated assets to purchase large quantities of SFM tokens in order to stabilize its price. In addition, Braden John Karony is also accused of “wash trading” in order to manipulate the token price.
In response to these allegations, Braden John Karony was arrested in Utah and Thomas Smith in New Hampshire. Kyle Nagy remains at large. If convicted, the defendants could face up to 25 years in prison.
Immediate reaction from the SFM share price
Following this news, SafeMoon’s share price plummeted, dropping from $0.00019654 to $0.00007804, or nearly 60% in less than 2 hours. As for SFM’s capitalization, at the time of writing it stands at just $52 million, down from around $115 million prior to the arrest of the cryptocurrency’s founders.
Sharp drop in SafeMoon crypto following arrest of its founders
Launched in March 2021, the SafeMoon cryptocurrency had quickly won over investors with a policy of redistributing half of the transaction fees generated to SFM token holders. At its peak on January 5, 2022, the price of the SFM token reached $0.00338272, taking its capitalization to over $8 billion.
