SafeMoon Executives Charged with Fraud, Accused of Diverting $200 Million in Crypto Assets for Personal Luxuries

Executives promised investors their funds were locked in SafeMoon's liquidity pool, but actually withdrew these assets secretly for personal indulgences; Founder, CEO, and former CTO each face three criminal charges as coin's valuation plummets post-charge announcement.

Founder Kyle Nagy and two top executives at SafeMoon have been charged by the U.S. Department of Justice with conspiring to commit securities fraud, wire fraud and money laundering. Both men face three criminal charges each and are accused of diverting investor funds for personal luxuries.
The U.S. Securities and Exchange Commission (SEC) filed related civil charges against the defendants and the company over the alleged unregistered sale of the SafeMoon token.
SafeMoon, created in March 2021, promised investors that their investments were 'locked' safely in liquidity pools and could not be pulled out by anyone. This, however, turned out to be false as significant losses were suffered by investors upon realizing that the pool was not locked and defendants were withdrawing money for personal indulgences.
After the announcement of charges, SafeMoon's valuation plummeted, losing more than half of its value according to CoinMarketCap. At its peak, the cryptocurrency had a market cap of $5.7 billion.
The SEC has stepped up its enforcement actions in the cryptocurrency market this year, despite backlash from industry players. The SafeMoon case is seen as a part of a broader effort by the SEC to regulate the cryptocurrency market.