Business News Report
February 12, 2024

SafeMoon’s $11.2M in Abnormal Transfers to Liquidity Pools Sparks Concerns Post Bankruptcy

SafeMoon's $11.2M in Abnormal Transfers to Liquidity Pools Sparks Concerns Post Bankruptcy

Anomalous transactions linked to the cryptocurrency and blockchain company SafeMoon (SFM) were detected by the blockchain security platform Cyvers Alerts. According to Cyvers Alerts’ announcement, an entity, acting as a deployer, added an address as an “approveLiquidityPartner,” subsequently withdrawing $11.2 million worth of liquidity from various pools to multiple addresses on various blockchains, including Ethereum, BNB, and Polygon.

Following the news, the SafeMoon native token SFM has experienced a decline of over 6% within the past 24 hours and is currently trading at $0.00003 as of the time of writing, according to data from CoinMarketCap.

However, it remains uncertain whether these transactions are associated with the company’s bankruptcy case.

Last year, SafeMoon initiated Chapter 7 bankruptcy proceedings, leading to the liquidation of debtor’s assets to settle creditors without any plans for restructuring. The company has an estimated 50 to 99 creditors, holding assets ranging between $10 million and $50 million, with debts falling in the bracket of $100,000 to $500,000. 

Preceding these events, SafeMoon’s executives faced arrests by United States officials on charges related to securities fraud conspiracy. Furthermore, the company is confronting a Securities and Exchange Commission (SEC) lawsuit, accusing it of fraud and violations of securities laws.

According to the SEC, the three founders of a bankrupt company, John Karony, Thomas Smith, and Kyle Nagy, are accused of orchestrating a “massive fraudulent scheme,” allegedly manipulating SafeMoon’s market capitalization to $5.7 billion.

The tactics involved purportedly included wash trading, deceptive marketing strategies, and providing misleading statements regarding liquidity lock-up timelines. While John Karony and Thomas Smith have been arrested, Kyle Nagy is currently evading authorities.

SafeMoon’s Cryptocurrency

Launched in 2021, during its operation period, SafeMoon provided a cryptocurrency with the goal of establishing a decentralized finance ecosystem. The company encouraged long-term holding and employed the “reflection” mechanism to incentivize holders while discouraging selling. Transactions incurred a 10% fee, with half of the fee distributed among all SafeMoon holders.

The recent SafeMoon activity could suggest a potential security breach or other transactions associated with the company’s recent bankruptcy proceedings, emphasizing the necessity for additional investigation and scrutiny. 

Disclaimer

In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.

About The Author

Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at [email protected]

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Alisa Davidson
Alisa Davidson

Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at [email protected]

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