The United States Securities and Exchange Commission (SEC) had accused SafeMoon and its executive team, specifically Kyle Nagy, John Karony, and Thomas Smith, of misusing investor funds for their personal use. Following these allegations, the executives were arrested, and the company lost its reputation.
“As alleged, the defendants lied to SFM investors concerning whether SFM’s use of ‘locked’ liquidity was inaccessible to the defendants, as well as their personal holding and trading of SFM.”Prosecutors.
In the wake of these events, SafeMoon applied for bankruptcy protection. The application, filed on Thursday to the United States Bankruptcy Court in the District of Utah, was signed by the company’s restructuring chief, Kenneth Ehrler. SafeMoon’s Chapter 7 bankruptcy filing means that the company’s assets will be liquidated and its debts paid off. This signifies the termination of the company’s operations and the sale of its assets to meet its debts.