The US Department of Justice has charged and arrested Safemoon's executive team for defrauding investors via Safemoon LLC and the Safemoon token (SFM). The DOJ alleges that the executive team, CEO John Karony, CTO Thomas Smith and Kyle Nagy personally withdrew over $200,000,000 USD from the Safemoon investment fund and used it for their personal interests.
Investors deposited funds into a supposedly locked liquidity pool of Safemoon tokens. The Safemoon team posited that the pool was coded so that the executive team could not siphon any funds. The team claimed to be working towards adding more trading pairs nor would they trade any SFM for their own benefit. However, the executives maintained access and used this to divert millions of dollars of SFM from the pools to their personal accounts.
Prior to the announcement, Safemoon saw a slight gain of around 60% taking it from $0.00012187 to $0.00020497 USD whereas it has since lost all of those gains in the last 24 hours.
What Happens Next?
Well, only 2 of the 3 executive team members charged have actually been arrested as Thomas Smith is still at large. Under the court of law they are innocent until proven guilty. The Safemoon executive team may have the opportunity to settle out of court, but they will likely go to trial. If it goes to trial then the discovery phase will yield mountains of evidence previously unknown to Safemoon investors. What happens during the trial, and what happens to the money of the investors remains to be seen.
If you've been following Safemoon you'll know that it has quite the die-hard fan base with some individuals even getting tattoos, purchasing a $250 merch kit and claiming any dissenting opinion to be FUD. Unfortunately, Safemoon seems to be another stain on the crypto community as investors will likely never see their money again.
