The Safemoon wreck continues, following the arrest of its directors. The company has just declared itself bankrupt, sending the SFM price plummeting even further. What will become of the company?
Safemoon company declares bankruptcy
The end of the story for Safemoon? The U.S.-based company, which has been plagued by legal problems, filed for bankruptcy yesterday. It was placed under “Chapter 7”, meaning that its management is entrusted to executives who will accompany the bankruptcy process, with funds being recovered to repay creditors. This is what is currently happening at FTX, for example.
According to filings, Safemoon’s creditors number between 50 and 99, and the company still has between $10 and $50 million in assets. It is due between $100,000 and $500,000.
In reaction to this news, the FMS share price plummeted again. It lost -35% in less than a day, reaching a price of 0.000049 dollars. Its capitalization now stands at just $17 million, compared with over $1 billion at the height of its success.
Safemoon, a success and a lightning fall
Safemoon is one of those crypto companies that enjoyed considerable success at launch, before plummeting. Its history is littered with controversy: even in its first year of existence, celebrities had been sued for promoting it.
Safemoon then suffered a $9 million hack last March, but the scandal was overshadowed by a much bigger one. Its executives were arrested last month. They are accused of having taken some $200 million from the project to finance their lavish lifestyles.
The challenge for the company’s managers will therefore be to recover the funds and repay Safemoon’s debts. As for the ex-managers, they face the possibility of several decades in prison. The Safemoon saga is therefore not entirely over, and the forthcoming trial should be followed with close attention.