The SEC accused SafeMoon and its executive team of orchestrating a massive fraud scheme. The SEC’s complaint explains how the defendants promised to skyrocket the altcoin price “safely to the moon.” However, the truth was just the opposite. They destroyed billions of dollars of market value. They also embezzled over $200 million in crypto assets from the project.
Altcoin price dropped more than 50% as SEC blamed!
The SEC’s complaint explains that SafeMoon’s price rose a whopping 55,000% between March 12 and April 20, 2021, eventually reaching a market value of over $5.7 billion. The narrative took a dark turn on April 20 when it was revealed that the liquidity pool was unsafe. Once the public became aware, the sales led to a 50% price drop. Interestingly, the latest SEC accusations were the spice of this situation. The altcoin lost half of its value in the last few hours.
In the midst of the financial storm, accusations allege Karony engaged in ‘wash trading’ to mimic market activity. Indeed, the lawsuit accuses Nagy, Karony and Smith of violating the registration and anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.
SafeMoon and what are the accusations against its executives?
cryptokoin.com As we reported, SEC Enforcement Division Crypto Assets and Cyber Unit (CACU) Chief David Hirsch expressed serious concerns about altcoins. He highlighted the vulnerability of decentralized finance (DeFi) startups to fraudsters due to the lack of required disclosures and accountability. According to Hirsch, Kyle Nagy took advantage of these loopholes to amass wealth at the expense of others. In this context, Hirsch made the following statement:
Decentralized finance claims to provide transparency and predictable results. But unreserved offers lack the disclosures and accountability required by law. It also attracts scammers like Kyle Nagy, who use these vulnerabilities to enrich themselves at the expense of others.
Kyle Nagy’s marketing rhetoric assured investors that the funds in SafeMoon’s liquidity pool were safe. On the contrary, a significant part of this pool remained unlocked. This allowed Nagy, Karony and Smith to splurge on a life of luxury.
In the midst of these developments, a warning also came!
CACU Vice President Jorge G. Tenreiro made a warning to altcoin investors. He highlighted the tendency of scammers to lure investors with lofty promises. In this context, Tenreiro used the following statements as a warning to cryptocurrency investors:
We urge investors to be extremely careful in this area. While scammers take advantage of the popularity of crypto assets and promise astronomical profits, they often only deliver a crash landing.
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