SEC charges and DOJ arrests hit Safemoon, causing a 60% token value plunge. The future of this embattled cryptocurrency remains uncertain.
The SEC filed a case against the cryptocurrency project Safemmon yesterday, accusing its executives of orchestrating a vast fraud scheme through the sale of unregistered securities that cost US investors billions of dollars in losses.
The CEO and CTO of Safemoon were detained by the DOJ on the same day for wire fraud, securities fraud, embezzlement, and money laundering in response to the regulator’s investigation.
Senior Safemoon team members allegedly used $200 million in investor property to buy luxury homes and cars after branding it “locked.”
This scandal caused the SFM token’s value to drop by 60% to an all-time low. Does this shitcoin have an end in sight?
The CEO and CTO of the cryptocurrency project are in danger after the SEC and DOJ accuse the Safemoon team of fraud and embezzlement
The Securities and Exchange Commission (SEC) has filed a civil lawsuit against the leaders of the cryptocurrency project, alleging that they sold unregistered securities and misled investors. This is bad news for Safemoon and its crew.
After reviewing the case filed by the federal market regulator, the US Department of Justice (DOJ) went ahead and detained Braden John Karony, the CEO of Safemoon, and Thomas Smith, the CTO.
But the creator of the cryptographic token, Kyle Nagy, is still alive.
The criminal gang was charged with three counts each of conspiracy to commit money laundering, wire fraud, and securities fraud in New York.
SEC-filed records reveal that Safemoon management had orchestrated a massively fraudulent scam that defrauded investors of their cryptocurrency.
They lied to their community in 2021 by saying Safemoon’s pools were locked, but the money had been spent on beautiful automobiles and other items.
The entire sum that bitcoin executives embezzled was $200 million.
We may see the following in a document from the Eastern District of New York U.S. Attorney Breon Peace:
The defendants are accused of deceiving investors and stealing millions to buy real estate, luxury cars, and a modified Porsche sports car.
The Justice Department claimed SafeMoon personnel used “complex transaction routing and centralised pseudonymous trading accounts.”
They told investors that cryptocurrency will travel “to the moon” and “push the price to stratospheric all-time highs.”
Finally, John Karony, Thomas Smith, and Kyle Nagy face a civil complaint from the SEC for selling unregistered securities in addition to criminal charges.
In the action against Safemmon, David Hirsch, the chief of the SEC Enforcement Division’s Crypto Assets and Cyber Unit, stated:
“Unregistered offerings attract fraudsters like Kyle Nagy, who use these vulnerabilities to enrich themselves at the expense of others, and lack the information and accountability required by law.”
The US federal courts must now decide the criminal computer organization’s penalty. After his capture, Safemoon’s creator will likely spend the longest term.
According to Reuters, SEC Chairman Gary Gensler said speculative excesses in the cryptocurrency industry, like the Safemoon case, weaken investor trust in U.S. financial markets.
Safemoon Token (SFM) valuation
The SFM coin’s situation is dire as a result of the SEC complaint and the executives of Safemoon’s arrest; yesterday, the coin’s value dropped by more than 60% on the cryptocurrency markets.
The project team’s effective marketing attracted investors immediately after the cryptocurrency’s March 2021 launch.
At the time, coins bearing a tax on all transactions were gaining popularity. For Safemoon, token holders paid 5% of trade value (half of the 10% cost) in SFM fees.
In 2021, this trait and cryptocurrency influencers’ “shilling” tactic to convince followers of the cryptocurrency’s future drove its price up.
Safemmon’s cryptocurrency hit an all-time high of $8 billion in capitalization at a price of $0.00338272 per unit in January 2022.
Its price plunged to $0.00009, reducing its market capitalization down to just $42 million, following the announcement of the DOJ and SEC accusations.
Moreover the red candle of yesterday was a strong one: the Safemoon token’s value quickly dropped to annual lows, breaking through any support and quickly moving the RSI from an overbought to an oversold position.
About $60 million vanished from the shitcoin market in less than a day.
The X community started to post the most absurd remarks about the direction that cryptocurrency prices would take at this point.
In jest, some even advocated “buying the dip” when SFM’s value fell by more than half.
Given the intensity of the downward trend, a price rebound is feasible, but going long now could result in large losses.
Unfortunately, or fortunately, cryptocurrency investors will forget Safemoon (SFM) and its 2021 highs.
This shitcoin, which made many degenerates billionaires during the last bull market but devastated a long list of buyers in 2022, is nearing the end of the queue.
After yesterday’s events, cryptocurrency traders who don’t understand “value investing” should avoid trying to earn quick money with “garbage coins.”
Moreover it is far preferable to concentrate on the coins having genuine market worth and a technological foundation with practical applications.
Last but not least—and perhaps most importantly—it is imperative to have patience in this society and avoid aiming to get wealthy quickly and with little money.
