SafeMoon fraud charges by SEC and Unregistered Crypto Offering
The charges stem from their involvement in an extensive fraudulent scheme related to the unregistered sale of the cryptocurrency security known as SafeMoon. SafeMoon fraud charges have been filed by the SEC against SafeMoon LLC, its creator Kyle Nagy, and its executives John Karony and Thomas Smith for the unregistered sale of the SafeMoon cryptocurrency. The SEC alleges that they promised to increase the token’s price but instead caused a market capitalization drop.
David Hirsch of the SEC emphasized that unregistered offerings like SafeMoon lack necessary disclosures and accountability, making them attractive to scammers. The SEC’s complaint alleges that Nagy assured investors that funds in SafeMoon’s liquidity pool were secure and inaccessible, but significant portions were never locked and were misused for personal expenses. The SEC warns investors to be cautious as fraudsters often fail to deliver on promised profits. SafeMoon experienced a rapid price increase of over 55,000 percent in 2021, but the price fell by nearly 50 percent when it was revealed that the liquidity pool was not secure. Following this, Karony and Smith allegedly manipulated the market using misappropriated assets.
