In the latest development, Safemoon, a crypto company, voluntarily initiated Chapter 7 bankruptcy proceedings in the District of Utah, as stated in their bankruptcy documentation. This action comes on the heels of the company’s founders facing indictment for securities fraud, wire fraud, and money laundering by the U.S. Securities and Exchange Commission and Department of Justice last month.
Safemoon US Files Chapter 7; SFM Token Plummets
On December 14, 2023, Safemoon US, LLC, the entity behind the safemoon.com website, lodged a Chapter 7 bankruptcy petition in Utah. This type of bankruptcy, often referred to as “liquidation,” necessitates selling the debtor’s nonexempt assets to settle debts with creditors.
For a business such as Safemoon, Chapter 7 bankruptcy signifies halting all operations, while a court-appointed trustee manages the sale of the company’s assets to repay creditors. The bankruptcy submission, authorized by the chief restructuring officer, reveals that Safemoon possesses assets valued between $10 and $50 million, against liabilities ranging from $100K to $500K.
Founded on March 1, 2021, by CEO John Karony, with assistance from Kyle Nagy and Thomas Smith, Safemoon introduced its native token safemoon (SFM) to the market at the end of December 2021. On January 5, 2022, SFM hit its peak value at $0.00338272. Currently, the token’s value is down by 98.7% from its all-time high, nearly two years prior.
However, last month brought turmoil as the SEC and the Eastern District of New York Department of Justice (DOJ) charged Safemoon with fraud, alleging misappropriation of millions. The DOJ accused the founders of extravagantly spending investor funds on high-end vehicles, real estate, and other luxury purchases.
Following the bankruptcy declaration, SFM‘s value plummeted to a record low, continuing its downward trajectory. In the Chapter 7 documentation, when asked whether the debtor owns or possesses any property requiring immediate attention, the restructuring officer affirmed with a “yes.” The assets in question, categorized as “other,” are listed as encompassing “cryptocurrency, intellectual property, and other intangible assets.”
What do you think about Safemoon filing for bankruptcy amid the SEC and DOJ charges? Share your thoughts and opinions about this subject in the comments section below.
