SafeMoon’s executive team has been indicted on multiple fraud charges, and jailed
The United States Securities and Exchange Commission (SEC) announced on November 1 that it is charging SafeMoon and three of its executives with fraudulent and unregistered securities sales related to the SafeMoon token. The Department of Justice released the indictments against the men at the same time.
According to the SEC charges, SafeMoon founder Kyle Nagy, CEO John Caroni and chief technology officer Thomas Smith siphoned $200 million worth of assets from the project and misappropriated investors' money. The Justice Department is charging the men with securities fraud, wire fraud and money laundering.
According to a Justice Department announcement, Caroni and Smith were arrested, while Nagy was arrested.
The SEC stated that the funds pledged to the SafeMoon token transaction would be locked in a liquid pool and not accessible to anyone, not even the defendants, in fact most of the pool was not locked.
US Attorney Brian Peace said:
“As alleged, the defendants deliberately misled investors and diverted millions of dollars to fuel their greedy schemes and enrich themselves by buying custom Porsche sports cars, other luxury cars and real estate.”
Described as the “TikTok meme coin,” SafeMoon gained 55,000% in value between March 12 and April 20, 2021, to reach a capitalization of more than $5 billion before collapsing when vulnerabilities were discovered in its smart contract code. The Justice Department says the market value has risen to $8 billion.
According to the SEC, Caroni and Smith misappropriated funds to make purchases of SafeMoon tokens to inflate its value. Caronim was also charged with the bath business.
SafeMoon has faced controversy before. In the year In February 2022, SafeMoon, Karony and several other celebrities were accused of pumping and dumping their tokens. SafeMoon was hacked in March 2023, but the hacker agreed to return 80 percent of the funds the following month.
