SafeMoon’s price plummeted by more than 36% after a disappointing bankruptcy filing shattered investors’ expectations.
In under a month since the United States Securities and Exchange Commission (SEC) initiated a lawsuit against SafeMoon and its creators, the company has opted to voluntarily file for Chapter 7 bankruptcy.
SafeMoon Token Plummets 36% After Bankruptcy Filing
The recent bankruptcy filing by SafeMoon has triggered a significant downturn in the SafeMoon token (SFM), resulting in a 36% drop in its value within the last 24 hours. This recent development marks a stark contrast to the initial enthusiasm the project once enjoyed, boasting a peak market cap of $1 billion and securing a position among the top cryptocurrencies.
SafeMoon
The downfall of SafeMoon gained momentum following allegations of intentional fraud by the project’s founders. The United States Securities and Exchange Commission (SEC) accused the founders of siphoning over $200 million from the project, causing a substantial loss in market value. Despite initial promises to guide the project “safely to the moon,” the SEC claims revealed a different narrative.
In response to the SEC’s legal actions, the project’s CEO, John Karony, and CTO, Thomas Smith, have been apprehended by U.S. authorities, while lead creator Kyle Naggy remains at large. The bankruptcy filing, submitted on December 14, adds another layer to the challenges faced by SafeMoon in the aftermath of these legal charges.
SafeMoon Investors Face Bleak Prospects Amid Chapter 7 Bankruptcy
For investors once hopeful for a SafeMoon resurgence, the recent Chapter 7 bankruptcy filing may mark the end of any revival aspirations. Chapter 7, commonly known as “liquidation bankruptcy,” focuses on the liquidation of remaining company assets to settle obligations to top creditors.
Companies opting for Chapter 7 are typically considered beyond the point of feasible reorganization (Chapter 11). This bankruptcy form discharges a significant portion of accrued debts, shielding entities from legal action by creditors seeking debt recovery.
As of the latest update, SafeMoon is trading at $0.00004203, signifying a 36% decline within the past 24 hours. From its 2021 peak with a market cap of $1 billion, the token’s value has plummeted to a mere $23 million, leaving minimal liquidity for holders aiming to divest their positions. The stark contrast from its highs illustrates the challenging circumstances faced by SafeMoon and its investors.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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