Crypto scam: SafeMoon declares bankruptcy

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When the crypto SafeMoon project was launched in 2021, many suspected it was a scam. 

It was the golden age of memecoins and shitcoins, and it seemed like SafeMoon was just another shitcoin. 

The collapse of SafeMoon’s price to the crypto scam

SafeMoon debuted on the crypto markets at 0.3 millionths of a dollar, and after just one month it reached its all-time high of nearly 14 millionths of a dollar. In other words, it made a +1,400% gain in four weeks after launch. After that, it practically did nothing but decline.

It seems to all intents and purposes a banal pump&dump scheme, so much so that by the end of 2021 the price had returned to one millionth of a dollar, and by June 2022 it had practically been reduced to zero. 

The current price of 0.004 millionths of a dollar is 99.97% lower than the historical maximum, but also 98% lower than the launch price. 

This is effectively a failed project whose price has completely collapsed, and this is a common outcome for most pump&dump projects.

Furthermore, it should be added that at the end of 2021 an attempt was made to salvage the situation with the launch of a new token, SFM, called SafeMoon V2, which however met a similar fate as the first one. 

The launch price was 1.6 thousandths of a dollar, rising to 17.2 in January 2022. From then on, the price of SFM practically did nothing but decrease. 

Currently it has dropped to 0.003 cents, which is -99.5% from the highs of January 2022. 

In other words, the SafeMoon team has practically launched two failed tokens on the crypto markets within a year.

The failure reveals the SafeMoon crypto scam

The news from yesterday is that SafeMoon has officially filed for bankruptcy.

Furthermore, it did not request the classic Chapter 11 of the US bankruptcy law, which allows for debt restructuring in order to restart, but Chapter 7. 

The Chapter 7 only provides for the liquidation of all assets in order to repay creditors as much as possible, with the inevitable consequence of the permanent closure of the business. 

The company is called SafeMoon US and is based in Pleasant Grove, Utah. It claims to have fewer than 100 creditors but more than ten million dollars in assets. It also claims to have less than $500,000 in liabilities. 

The Chapter 7 request was signed by Chief Restructuring Officer Kenneth Ehrler. It is worth noting that key members of the company have already been arrested by the United States Department of Justice for alleged fraud, after the SEC accused founder Kyle Nagy, CEO John Karony, and CTO Thomas Smith of violating securities laws.

The official reason for the bankruptcy request seems to be the company’s inability to continue paying employees’ salaries.

The scam

The SEC has accused the team members of “merely” violating the rules on the sale of securities, but the Department of Justice has effectively arrested them for alleged fraud. 

Although in theory one should wait for the final judgment of the court to assert with certainty that it was a scam in all respects, in reality everything suggests that it can already be understood as such now. 

Actually, to tell the truth, many believed that he was from the beginning, only that at the time there were only clues and not certain evidence. 

Now there is evidence, and only the final formalization by the judiciary is missing. 

The SafeMoon project was described by its founders and promoters as a network and platform of innovative Web3 products to connect with a thriving community of supporters and agents of change.

In reality, these were just words aimed at convincing people to buy their tokens, since besides the tokens and the tools to use them, there was absolutely nothing. 

For this reason, there has always been suspicion that it was a scam, because selling a token claiming to be the cryptocurrency of a community, when in reality there is no community and no platform to manage it, effectively means lying. 

And scams are exactly tricks that use lies to convince people to give money to scammers in exchange for nothing. 

Unfortunately, the SafeMoon team convinced many promoters to promote the sale of their tokens, so the people involved in the alleged fraud are many more than those who have been arrested so far.