November 2, 2023 12:21 pm Comments

SafeMoon was never so safe and has likely gotten less safe over the last several days.

According to recent court filings from the SEC, DOJ, and IRS, the founders of SafeMoon have been arrested and charged.

The Department of Justice announced that it arrested SafeMoon CEO John Karony and Chief Technology Officer Thomas Smith on Wednesday. Authorities are currently looking for Kyle Nagy.

Law enforcement officials have accused and charged the trio with wire fraud, conspiracy to engage in securities fraud, and money laundering.

The IRS Criminal Investigation New York Field Office announced: “Founders and execs of SafeMoon charged in multimillion-dollar digital fraud scheme following an investigation worked by IRS NY’s Cyber & J5 groups w/our law enforcement partners.”

Popular crypto account Whale Charts writes: “SafeMoon founders ends up in the same boat as HEX founder Richard Heart.

The criminal complaint claims that the defendants and their business, SafeMoon US LLC, lied to investors about what ‘locked’ liquidity meant and then used the money from investors to buy things like a Porsche 911 and real estate.”

CoinDesk reports:

While facing criminal charges, the defendants were also charged for securities violations by the SEC.

“Unregistered offerings lack the disclosures and accountability that the law demands, and they attract scammers like Kyle Nagy, who use these vulnerabilities to enrich themselves at the expense of others,” said David Hirsch, Chief of the SEC Enforcement Division’s Crypto Assets and Cyber Unit (CACU).

SafeMoon responded to the recent development:

“We are reviewing the recent news and we of course take these issues extremely seriously. As we receive more information, we will do our best to address the situation as quickly as possible.

In the meantime our teams continue to build and we keep our focus on delivering for our users, building our vision and moving forward on our mission.”

SafeMoon plummeted in price after U.S. authorities and regulators filed charges against the founders of the project.

Daily Coin added:

Even before the SEC and FBI charges, a series of prior exposés had highlighted concerning practices within the company. This began in September 2021, following the resignation of SafeMoon’s previous CTO, Hank Wyatt.

Join the conversation!

We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.