The SEC charged SafeMoon, its founder Kyle Nagy, SafeMoon US, and the company’s top executives, John Carone and Thomas Smith. The regulator has uncovered a fraudulent scheme involving the unregistered sale of SafeMoon (SFM) tokens, a cryptocurrency that promised investors huge returns.
The SEC accuses cryptocurrency project executives of a Ponzi scheme that misled investors by guaranteeing the safety of their funds, when in reality, significant portions of the liquidity pool were never locked. This led to the embezzlement of funds exceeding $200 million for personal use.
“DeFi claims to provide transparency and predictable results, but off-the-record offerings lack the disclosure and accountability the law requires, and they attract fraudsters like Kyle Nagy,” said David Hirsch, head of the SEC’s Enforcement Division’s Crypto-Assets and CyberAssets Unit. “They use these weaknesses to enrich themselves at the expense of others.”
The SEC reported that SFM saw prices rise more than 55,000 percent from March 12 to April 20, 2021. Its market capitalization reached $5.7 billion during this period. However, this was short-lived when the truth about the open liquidity pool came out in April 2021. This revelation led to prices collapsing by almost 50%.
Following the price collapse, Carone and Smith allegedly used misappropriated assets to prop up SFM prices and manipulate the market. In addition, Carone was accused of engaging in money laundering, a practice that created a false impression of market activity.
Today we charged SafeMoon LLC, its creator Kyle Nagy, SafeMoon US LLC, the company’s CEO, John Carone, and CTO, Thomas Smith, with committing a massive fraudulent scheme through the unregistered sale of the crypto asset security, SafeMoon.
– US Securities and Exchange Commission (@SECGov) November 1, 2023
The SEC filed its complaint with the U.S. District Court for the Eastern District of New York, charging the defendants with violating the registration and anti-fraud provisions of the Securities Exchange Act of 1933, and the anti-fraud provisions of the Securities Exchange Act of 1933. 1934.
SafeMoon executives face multiple federal charges
SafeMoon’s founders and executives face federal charges of conspiracy to commit securities fraud, wire fraud, and money laundering. Carone, Nagy and Smith are accused of orchestrating a fraudulent scheme to mislead SFM investors and embezzle millions of dollars.
Carone and Smith have already been arrested. Carone was arrested in Provo, Utah, and Smith in Bethlehem, New Hampshire. However, Naji remains at large, and law enforcement authorities are desperate to arrest him. Separately, the US Department of Justice has filed lawsuits against SafeMoon’s founders in federal court in Brooklyn.
The SEC charged SafeMoon, its founder Kyle Nagy, SafeMoon US, and the company’s top executives, John Carone and Thomas Smith. The regulator has uncovered a fraudulent scheme involving the unregistered sale of SafeMoon (SFM) tokens, a cryptocurrency that promised investors huge returns.
The SEC accuses cryptocurrency project executives of a Ponzi scheme that misled investors by guaranteeing the safety of their funds, when in reality, significant portions of the liquidity pool were never locked. This led to the embezzlement of funds exceeding $200 million for personal use.
“DeFi claims to provide transparency and predictable results, but off-the-record offerings lack the disclosure and accountability the law requires, and they attract fraudsters like Kyle Nagy,” said David Hirsch, head of the SEC’s Enforcement Division’s Crypto-Assets and CyberAssets Unit. “They use these weaknesses to enrich themselves at the expense of others.”
The SEC reported that SFM saw prices rise more than 55,000 percent from March 12 to April 20, 2021. Its market capitalization reached $5.7 billion during this period. However, this was short-lived when the truth about the open liquidity pool came out in April 2021. This revelation led to prices collapsing by almost 50%.
Following the price collapse, Carone and Smith allegedly used misappropriated assets to prop up SFM prices and manipulate the market. In addition, Carone was accused of engaging in money laundering, a practice that created a false impression of market activity.
Today we charged SafeMoon LLC, its creator Kyle Nagy, SafeMoon US LLC, the company’s CEO, John Carone, and CTO, Thomas Smith, with committing a massive fraudulent scheme through the unregistered sale of the crypto asset security, SafeMoon.
– US Securities and Exchange Commission (@SECGov) November 1, 2023
The SEC filed its complaint with the U.S. District Court for the Eastern District of New York, charging the defendants with violating the registration and anti-fraud provisions of the Securities Exchange Act of 1933, and the anti-fraud provisions of the Securities Exchange Act of 1933. 1934.
SafeMoon executives face multiple federal charges
SafeMoon’s founders and executives face federal charges of conspiracy to commit securities fraud, wire fraud, and money laundering. Carone, Nagy and Smith are accused of orchestrating a fraudulent scheme to mislead SFM investors and embezzle millions of dollars.
Carone and Smith have already been arrested. Carone was arrested in Provo, Utah, and Smith in Bethlehem, New Hampshire. However, Naji remains at large, and law enforcement authorities are desperate to arrest him. Separately, the US Department of Justice has filed lawsuits against SafeMoon’s founders in federal court in Brooklyn.